Responsible gaming compliance: why failures in iGaming cost millions

Introduction

Responsible Gaming (RG) is a set of policies, procedures and tools that gambling operators (online casinos, bookmakers, lotteries) are required to implement to protect players from the potential negative consequences associated with gambling, primarily gambling addiction (ludomania). The main idea behind RG is to create a safe environment where gambling is a form of entertainment rather than a financial or social threat. RG ensures that the operator fulfils its Duty of Care towards the customer. This means the company is legally responsible for monitoring player behaviour and must intervene if it detects signs of problem gambling.

Rules of the game: what regulators require and how to implement them

RG regulation has become the strictest and most important licensing requirement in the iGaming industry. It is no longer an ethical recommendation but a legal obligation aimed at protecting players from financial and social harm caused by gambling addiction. Obtaining an iGaming licence, particularly in high-reputation jurisdictions, is a complex, multi-stage and lengthy process that goes far beyond standard business registration. Regulators focus on protecting both players and the financial system and therefore assess not only legal but also technical, financial, and operational reliability.

The first major barrier is financial stability and reputation. The second is technical compliance, including certification of the random number generator (RNG) to ensure game fairness and confirmation that the IT infrastructure meets the highest security and player data protection standards. The third, and often the most risky, aspect is operational compliance, requiring the development and implementation of effective, continuous anti-money laundering (AML)/Know Your Customer (KYC) and RG policies. These policies must not be purely formal documents, but fully integrated automated systems capable of monitoring, intervening and reporting on player activity.

In practice, RG is a daily, continuous process embedded across all stages of an online casino or bookmaker’s operations, from registration to financial monitoring. It consists of three core stages: Proactive protection (pre-game), Monitoring and intervention (in-game), and Compliance protocols (post-game).

Proactive protection

Proactive protection involves continuous monitoring of player behaviour and early intervention when signs of risk are detected, even if the player has not requested assistance. The absence of effective proactive protection, or its merely formal application, is a direct basis for multimillion-level fines, as regulators treat such failures as exploitation of vulnerable customers.

The Player Management System (PMS) must monitor “markers of harm” on a 24/7 basis, including behavioural changes such as a sudden fivefold increase in deposits, persistent play at unusual hours indicating potential isolation or sleep disruption, cancellation of withdrawal requests to continue playing, or attempts to circumvent self-imposed limits. Each player is assigned a risk rating, and once a player moves from the “green” to the “yellow” zone, the first level of intervention is triggered automatically.

Monitoring and intervention

Once risk is identified, intervention must be decisive, timely and legally correct. Any procedural error is viewed by regulators as a failure to meet the duty of care.

Escalation typically follows a structured approach: upon entering the “yellow” zone (for example, after three hours of continuous play), the player receives a reality check or personalised communication encouraging limit reduction. If behaviour persists, trained support staff intervene via chat or telephone using an approved script, offering a time-out and support resources. When risk escalates to the “red” zone, the compliance team must take forceful action, such as imposing a 24–72 hour cooling-off period and/or applying stricter deposit limits that the player cannot amend.

Compliance protocols

Cooling-off periods are mandatory: any request to increase limits must be delayed by 24–72 hours, and immediate increases constitute a serious regulatory breach. Affordability checks require gameplay to be suspended and source-of-funds verification initiated once loss thresholds are exceeded, forming a critical link between RG and AML controls. Self-exclusion integrity must ensure that excluded players cannot re-register by any means, requiring integration with national exclusion registers (where applicable) and internal cross-monitoring mechanisms.

The proper implementation of these systems transforms RG from a regulatory burden into a core business protection tool and demonstrates full compliance with the operator’s Duty of Care to the regulator.

The price of ignorance: How to lose a round sum due to RG failures

William Hill Group companies received a £19.2 million fine for numerous systemic violations across AML and RG. The most egregious RG violations were the operator’s failure to intervene when customers showed signs of problem gambling and lost sums of money in a short period of time: in particular, one customer was allowed to lose £38,000 in five weeks, while another lost £36,000 in four days, without adequate affordability checks and intervention. In addition, there were cases where customers were allowed to increase their credit limits without complying with the mandatory 24-hour “cooling-off period”.

The Entain Group, which operates brands such as Ladbrokes and Coral, was fined £17 million for failures in AML and RG in both its online and land-based divisions. The main RG failure was the lack of proactive intervention in cases where customers showed signs of addiction and deposited large sums of money without proper verification of their financial origin. The regulator cited the example of a customer who was allowed to deposit £742,000 over 14 months without adequate source-of-funds checks.

The Australian company Star Entertainment Group was fined a record A$100 million (approximately €60 million) by the New South Wales government. Although most sanctions were imposed for gross systemic AML violations, the investigation also revealed catastrophic failures in social responsibility. In particular, the company provided gaming credit to customers who were on the self-exclusion register and encouraged those with obvious signs of problem behaviour to gamble. The regulator emphasised that the AML failures failed to protect RG, which increased the total fine amount.

Conclusions

RG regulation in the iGaming industry means this area has finally moved from an ethical recommendation to a strict legal obligation. Regulators require operators not only to provide tools such as self-exclusion buttons passively, but also to proactively intervene and continuously monitor customer behaviour. Business survival depends directly on a company’s ability to implement and maintain effective automated systems that can identify markers of harm and apply protective measures such as cooling-off periods or mandatory affordability checks.

At Manimama Law Firm

At Manimama Law Firm, we help businesses navigate this new reality effectively. We prepare documentation, manage application processes, and develop long-term crypto compliance strategies.