Online Gambling Operator Fafabet Hit With £170,000 Fine by UKGC
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An online gambling company, Taichi Tech Limited, operating under the brand Fafabet, has been slapped with a substantial £170,000 fine by the UK Gambling Commission (UKGC). This significant penalty comes after an in-depth investigation revealed multiple regulatory failures, including the use of unfair terms and conditions within their promotions. Beyond the financial penalty, Fafabet is now mandated to undergo a third-party audit. This crucial step will scrutinize the effective implementation of their anti-money laundering (AML) and safer gambling policies, procedures, and controls.
The UKGC's investigation brought to light a particularly concerning clause in Fafabet's bonus terms for new casino promotions. The terms explicitly stated: “Fafabet have the right at their own discretion to close accounts or forfeit winnings.” The UK Gambling Commission determined that this discretionary term allowed the operator to unilaterally close customer accounts or confiscate winnings without clear justification, thereby breaching the fair and open licensing condition. Such clauses in United Kingdom are deemed to lack transparency and possess the potential to lead to unfair outcomes for consumers.
It's crucial to understand that the Consumer Rights Act 2015 (CRA) serves as the overarching consumer protection legislation in the UK. This Act is directly referenced within the Licence Conditions and Codes of Practice (LCCP), which all gambling companies must adhere to. The LCCP explicitly requires licensees to ensure that their terms and practices are not only fair and clear but also fully compliant with consumer protection law. Consequently, operators are legally bound to consider the CRA as a fundamental part of their compliance obligations under the LCCP.
Further deficiencies were uncovered during the investigation, extending beyond unfair terms to include significant failures related to anti-money laundering and social responsibility breaches. Examples of these failings included instances where certain customers were able to gamble substantial sums of money within very short periods, despite the operator possessing only limited information about them. Additionally, the Commission noted cases where individuals exhibiting potential markers of harm – such as rapid, high-velocity spending over short durations – received insufficient interaction or intervention from Fafabet. Worryingly, even when safer gambling emails were dispatched but not acknowledged by the customer, and concerning behavior persisted, there was a clear lack of further follow-up or intervention from the operator.
John Pierce, Director of Enforcement and Intelligence at the Gambling Commission, underscored the UKGC's firm stance: “We expect all operators — regardless of their size or customer base — to comply with consumer protection legislation and ensure their terms and conditions meet regulatory standards. Licensed operators must ensure their terms are clear, fair, and transparent, so customers fully understand what to expect.” He further elaborated that the Commission’s assessment identified significant deficiencies in Fafabet’s social responsibility and anti-money laundering controls, including a failure to effectively manage risk and implement adequate consumer protection measures.
Taichi Tech Limited has acknowledged these shortcomings, admitting that it previously fell short of the standards expected by the Commission. The company has stated that it has since initiated steps to rectify these issues. As part of the regulatory outcome, the operator is now required to commission an independent third-party audit to provide crucial assurance of its ongoing compliance with all relevant regulatory requirements.
