When you watch the F1 Sauber team in the British Grand Prix, it might have to rename itself and to change its livery, as it has done in the past. STAKE, the gambling website that is this year the team's "Name Sponsor" is amongst the UK websites that's no longer available.

Told its financial crime, particularly money laundering and terrorist financing, policies, procedures were inadequate, TGP Europe was told it would have to pay a penalty of GBP3.3 million. But it seems from the Commission's statement that there was a get out clause: i.e. get out of the UK and you don't have to pay the penalty. 

The Commission said in a statement "TGP Europe surrendered its licence after being told it needed to pay a GBP3.3 million penalty and make significant improvements if it wanted to continue trading in Great Britain."

TGP is important. It provides "white label" gambling sites to many other companies. White label services abound in almost all services sectors. From dating sites, through hotel and airline bookings to financial services. Booking.com, Expedia and many more provide the services you access through what are, in effect, shop fronts / affiliate deals. Banking as a Service has provided a leg up for many businesses that could not hope to start a bank from scratch.  And of course, the concept is widely used in crime as a service. In fact, it's the crime as a service model that has created the concern over XaaS - and the closing of crime as a service businesses around the world in recent months has increased the scrutiny of the White Label/XaaS industry

The implications of the Commission's determination are, therefore, extraordinarily widespread, hitting at a business model that has grown exponentially in the past five or six years.

But it doesn't stop there. 

"A Commission investigation revealed failures to:

• carry out effective due diligence on each entity involved in the ownership of the third party
• carry out due diligence on the source of funds for business arrangements
• sufficiently consider money laundering risks
• sufficiently consider any activity by a third-party that is illegal, in either GB or the territory in which it is conducted.

Anti-Money Laundering (AML) breaches included failing to effectively implement enhanced due diligence measures outlined in its own AML policy by not effectively scrutinising information received from a third party.

This is the second time TGP Europe has breached regulations. In 2023 the operator was fined £316,250 for failures including not adequately considering and mitigating money laundering risks posed by business-to-business relationships, and having ineffective policies and procedures in relation to due diligence undertaken prior to white label agreements.

What does that mean? Basically, it means that the company licensed the use of its platform to third parties without "adequately" assessing them for financial crime risk. 

But that's not the really big effect.

This is what the Commission said, 

"TGP’s exit from the GB market means several football clubs now have sponsorship arrangements with unlicensed gambling businesses.

The Commission yesterday contacted AFC Bournemouth, Fulham FC, Newcastle United FC, Wolverhampton Wanderers FC and Burnley FC warning of the risks of promoting unlicensed gambling websites.

The Commission is seeking assurance from the clubs that they have carried out due diligence on their white label partners and that consumers in Great Britain cannot transact with the unlicensed sites.

Clubs will be asked to demonstrate that they have assurance that any steps to geo-block the sites are effective, recognising that some blocking can be easily by-passed by use of tools such as a Virtual Private Network.

Clubs will be expected to carry out sufficient due diligence to assure the Commission that consumers cannot transact with the sites from Great Britain by any means. The Commission will also be taking steps to independently verify effective measures are in place.

The letter warns that club officers may be liable to prosecution and, if convicted, face a fine, imprisonment or both if they promote unlicensed gambling businesses that transact with consumers in Great Britain."

The implications of this are considerable: If the same approach is taken by other regulators, then the world of international sports sponsorship will be thrown into disarray, similar to that when tobacco advertising was banned in some, but not all, countries, There is a vast amount of crypto-related money in sports: what if regulators decide that only those crypto companies that are regulated in their jurisdiction may be advertised? What if it goes so far as to say that TV companies must ensure that adverts by non-regulated businesses are not displayed? Will regulators be able to enforce an ad-ban, on a jurisdictional basis, against Google Ads? 

This decision might seem, at first sight, like a little local difficulty relating to a relatively small player in a marginal regulated market (both of those statements are in fact not true: TGP is a big player in a massive market that, largely, operates under the radar). 

The final group of businesses affected by this decision are payment services providers including card companies and banks. 

Decide for yourself: are payments made, and especially payments received, proceeds of a predicate crime? 

Websites affected and already marked as "inactive" are the following: 

12bet.uk 138.co.uk 6686sports.co.uk 8xbet.co.uk 96uk.com ayxbet.co.uk bcgame.uk betvision.com bj-88.co.uk bk8.uk bk8now.uk bob88.co.uk de-bet.co.uk  duelbits.co.uk fun78.com fun88.co.uk hthbet.uk i8bet.co.uk kaiyun.co.uk  kybet.co.uk leyubet.co.uk nova88bet.co.uk oubao.co.uk sbotop.co.uk sportpesa.uk  sportsbetio.uk stake.uk.com tlcbet.co.uk tlcbet.com uk-wl.co.uk

The Commission's statement is here: https://www.gamblingcommission.gov.uk/news/article/tgp-europe-leaves-gb…

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