The UK’s gambling and financial regulators insist their partnership is strong, but as open banking and instant payments reshape the industry, questions remain over who truly oversees the money moving between players and operators
When a gambler deposits funds with an online betting operator, the transaction crosses one of the most heavily regulated thresholds in the economy, touching both financial and gambling law. Yet the question of who actually oversees that moment, and what happens if it goes wrong, remains surprisingly open.
In the UK, gambling operators are licensed by the Gambling Commission (UKGC), while the payment providers that move customer funds are authorised by the Financial Conduct Authority (FCA). Between them lies a shared responsibility to stop illegal activity, prevent harm, and protect the integrity of financial flows worth billions of pounds each year.
But as gambling payments move from cards to open banking and other instant transfer rails, this shared responsibility is looking increasingly blurred.
Two regulators and one missing link
The FCA’s own description of its role in gambling payments underscores the complexity. The FCA “does not provide an independent view on high-risk sectors”, says Matthew Long, Director, Payments and Digital Assets at the FCA, instead relying on His Majesty’s Treasury’s National Risk Assessment (NRA) of Money Laundering and Terrorist Financing to identify and rank risks. The most recent assessment lists casinos as a high-risk category, but not gambling payments more broadly.
Authorised or registered payment firms, Long adds, must conduct their own risk assessments “which must take into account the NRA” and design controls accordingly. Where a client is conducting unlicensed gambling, Long says, “this should be considered illegal activity” under the Proceeds of Crime Act.
This framing places most responsibility on the firms themselves. Payment institutions are expected to interpret the national risk picture and apply it to their own business models. It means the FCA’s role is largely supervisory and reactive, rather than sector-specific.
The FCA points to its 2022 Memorandum of Understanding (MoU) with the Gambling Commission as evidence of active cooperation. The document establishes a framework for “consultation, coordination and information sharing” and sets out how the two regulators will escalate issues which cross their remits.
Under the MoU, the FCA and UKGC are required to notify each other of significant developments, designate points of contact, and respond to inquiries “within 10 working days” where possible. If agreement cannot be reached, the issue is escalated through several layers – first to Executive Directors, then to both Chief Executives, and ultimately to HM Treasury and the Department for Culture, Media and Sport for a cross-government view.
A UKGC spokesperson tells SBC Leaders the Commission’s MoU with the FCA “ensures we have a close working relationship” and remains “the best way to achieve a fruitful working relationship.”
What the MoU does not do is create shared enforcement powers or a joint supervisory body. It explicitly states that it is “a statement of intent” and “does not give rise to legally binding obligations,” the spokesperson says. Nor do the two regulators exchange enough personal data to require a dedicated data-sharing agreement, though the MoU says that position will be “kept under review”.
Under the MoU, the regulators also commit to quarterly meetings and to respond to each other’s requests in a timely way, with formal escalation to senior leadership if needed.
This leaves coordination dependent on goodwill and communication rather than a standing structure. In practice, it means that where questions arise about the conduct of a payment provider serving a gambling operator, the FCA and UKGC must decide case-by-case which agency takes the lead.
Fintechs in the frame
This lack of clarity is becoming more significant as payment technology evolves. Open banking and real-time account-to-account transfers are now widely used by betting and iGaming operators to reduce friction and speed withdrawals. Each new connection between a gambling site and a consumer’s bank account raises fresh questions about oversight.
Long says the FCA supports the expansion of open banking “into a wider series of use cases” and that “appropriate protections for consumers” remain a priority. But he reiterates that firms “authorised or regulated to provide open banking-related activities… are expected to consider the NRA when conducting risk assessments”.
This approach gives open banking providers the same discretion as other payment institutions: to determine their own level of risk and apply controls accordingly.
The Commission draws a perimeter line here, with the spokesperson saying “our role is to regulate the gambling operator rather than the payments systems”. This places day-to-day oversight of open banking providers and other PSPs with the FCA, while the UKGC focuses on how licensed operators use those rails.
For critics, this means there is still no single authority ensuring gambling payments are scrutinised with the same rigour as gambling licences.
Enforcement without a map
Long says that authorised payment institutions must have “effective controls, policies and procedures to protect against financial crime”, but the specifics of how those are applied to gambling are not public. The Commission, meanwhile, ensures licensed operators work with approved payment partners and do not accept credit card deposits or facilitate unlicensed gambling.
Both regulators have powers to act where illegal gambling or money laundering is identified. Yet because their remits are defined by separate statutes (the Gambling Act 2005 and the Financial Services and Markets Act 2000) neither has an end-to-end view of the payment chain.
The MoU allows them to share information about investigations, licence breaches or suspected unlicensed activity, but cooperation is voluntary and subject to confidentiality restrictions. Even when information is shared, the receiving regulator must still act within its own legal perimeter.
Systemic friction
This gap matters because payment behaviour is increasingly at the heart of both consumer protection and financial crime risk. Operators are expected to monitor affordability, PSPs are expected to detect suspicious flows, and banks are encouraged to offer voluntary gambling blocks. Yet there is no unified rulebook defining how these duties fit together.
Industry observers say this has led to “soft enforcement” – a reliance on dialogue, thematic reviews and joint statements rather than coordinated supervision. In practice, firms often face overlapping but inconsistent expectations from both regulators, with neither side empowered to give definitive guidance.
Asked whether the current model is sufficient to protect consumers, the UKGC spokesperson says the Commission “has a close working relationship with the FCA that ensures appropriate collaboration in delivering our respective regulatory roles.”
The FCA’s responses from Long suggest it is comfortable operating within that structure, noting that “the FCA operates within the legislative and policy framework set by His Majesty’s Treasury, which determines the regulatory perimeter”. Any change to that perimeter, it said, “falls within HMT’s remit”.
This statement leaves the door open for future reform but confirms that the FCA sees its role as set by the government, not by inter-agency negotiation.
A question of accountability
For the Gambling Commission, the challenge is equally complex. It is charged with preventing gambling from becoming a source of crime and disorder and ensuring games are conducted fairly, yet it relies on the financial system to detect and block much of that activity. In recent years, the Commission has stepped up enforcement against operators for anti-money laundering (AML) failings and partnered with major banks to block payments to unlicensed websites.
On the prospect of joint powers or enhanced data-sharing, the Commission says the MoU remains its preferred tool, rather than seeking new statutory arrangements.
However, without direct authority over payment firms, its influence remains limited to the gambling licence itself. If a fintech provider or e-money institution facilitates illegal gambling, the Commission must rely on the FCA to intervene.
Both regulators insist that their relationship is constructive and that the MoU enables efficient communication. Quarterly meetings are scheduled to review the arrangement and address any emerging issues.
The MoU framework commits both sides to regular reviews and escalation routes, while the Commission’s illegal-market work highlights that effective payment disruption depends on continued cooperation with PSPs and banks.
But as new technologies bring gambling and financial services ever closer, the UK’s dual-regulator system may come under increasing pressure to adapt. The question remains unresolved: when money moves between a player and a betting platform, who’s really watching?
This feature first appeared in SBC Leaders 38th edition, the full version of which is available here.
