To: Executive Leadership Team
From: TGB Strategy Office
Date: 4 June 2025
Subject: Regulatory Expectations for Third-Party Oversight in Gambling Operations
Executive Summary:
Regulators increasingly expect gambling operators to take full accountability for the conduct, compliance, and risks associated with third-party service providers. This includes affiliates, white-label partners, data processors, customer support vendors, and technology suppliers. The strategic imperative is to build a proactive, auditable oversight framework that ensures regulatory alignment and mitigates reputational and compliance risks.
Context and Issue:
As regulatory scrutiny intensifies across global gambling markets, the use of third parties has emerged as a critical compliance risk. Authorities in jurisdictions such as the UK, Sweden, Australia, and Ontario have sanctioned operators for failures in third-party conduct, particularly around marketing practices, data protection, and responsible gambling.
For example, the UK Gambling Commission has repeatedly fined operators whose affiliates used misleading advertising, even when those affiliates were not directly employed by the licensee. Similar trends are visible in Australia’s crackdown on offshore marketing agents and Ontario’s registration requirements for iGaming suppliers. Regulators are no longer accepting “outsourcing” as an excuse for non-compliance.
In this context, regulators expect licensed entities to demonstrate control over third-party relationships, regardless of legal ownership or operational distance. The accountability chain remains with the licensee.
Strategic Implications:
Third-party oversight is no longer an operational afterthought; it is a core governance obligation. Regulators expect licensees to integrate third-party management into their risk and compliance architecture with the same rigour applied to internal operations.
Key expectations include:
- Due diligence before onboarding, including financial health, integrity, and past regulatory history.
- Contractual safeguards that impose clear obligations for compliance with licensing conditions, responsible gambling measures, and data security.
- Ongoing monitoring and audits to assess conduct, output quality, and adherence to standards.
- Incident response protocols that ensure timely reporting and remediation of any third-party breaches.
Failure to meet these standards exposes operators to enforcement action, reputational damage, and in extreme cases, licence suspension. The reputational contagion from third-party shortcomings, especially in areas like data breaches or misleading advertising, can rapidly erode regulatory trust and stakeholder confidence.
Additionally, jurisdictions introducing or reviewing gambling legislation (e.g., Brazil, India, several US states) are watching mature markets for benchmarks. Firms that demonstrate robust third-party oversight may be better positioned for future licence applications or partnerships in new markets.
Recommended Actions:
- Conduct a full audit of all third-party relationships, categorising them by regulatory risk tier and business criticality.
- Revise contractual frameworks to include regulatory compliance obligations, audit rights, and termination clauses for breach of licence conditions.
- Develop a Third-Party Oversight Policy that outlines onboarding, monitoring, reporting, and offboarding protocols, approved by the board and reviewed annually.
- Assign internal accountability by appointing a senior executive responsible for third-party governance across compliance, legal, and procurement functions.
- Establish a regular review cadence, including risk-based monitoring, performance scoring, and a remediation framework for underperformance or non-compliance.
Closing Leadership Note:
Effective third-party oversight is not only a regulatory requirement but a hallmark of mature risk governance. Leadership teams must move beyond reactive compliance and institutionalise proactive controls. As regulators continue to close the loopholes between licensee and third-party actions, demonstrating control, documentation, and diligence will be essential to sustaining regulatory trust and strategic licensing privileges.
Footnotes:
- UK Gambling Commission Enforcement Reports, 2023–2024
- Alcohol and Gaming Commission of Ontario (AGCO) Registrar’s Standards for Internet Gaming, 2023
- Australian Communications and Media Authority (ACMA) Enforcement Updates, 2024