An investigation has revealed that Mastercard and Visa have been failing to stop their networks being used to make transactions on illegal gambling websites that have been accused of scamming UK consumers out of thousands of pounds. Despite previous commitments to block such transactions, Mastercard was found to be available alongside cryptocurrency as a payment option on nine unlicensed sites, and Visa was available on two websites targeting UK customers with deals for casino games and live sports betting.
The Investigate Europe team of investigative journalists coordinated the investigation into a network of gambling sites that were found to be operating in Europe despite being banned.
These platforms have reportedly scammed UK customers, leading to significant financial losses. Complaints include difficulties in withdrawing winnings and abrupt account closures after disputes. One user of one of the casino sites reported having frequent thoughts of suicide after having amassed debts of €70,000. Another German player lost €245,000 on a blacklisted gambling site. He was able to pursue the website in German courts and judges ruled in 2023 that the shell corporation that managed the website owed the player all of his losses back. However, two years later, he is still waiting to see the money.
Both Mastercard and Visa profit from these illicit transactions, earning a small fee for each transaction processed on their networks. These findings raise concerns about both the role of the payment giants in facilitating such transactions and about the apparent failure of regulators to block the sites in the first place.
The UK’s Gambling Commission has been said to be aware of these sites and the complaints against them and claims to be working to address the issue, having issued numerous cease-and-desist notices and referred URLs for removal. But as of the beginning of March the sites still remained accessible, accepting payments from UK customers and boasting new offers.
Mastercard and Visa have insisted they investigate illegal activity on their networks and emphasised that it was up to partner banks to ensure that merchants were acting lawfully and in accordance with their rules. But neither company commented on the previous agreement they had with the Gambling Commission to block unlicensed gambling transactions.
If found guilty of facilitating illegal activity, these card giants could face hefty fines and penalties, public backlash, increased scrutiny from regulators and reputational damage. Additional consequences might also include lawsuits from affected customers and impacts of business relationships.
If you got caught, would you be able to pay the price?
The scale of these illegal gambling operations and their use of major payment processors like Mastercard and Visa raises critical questions about financial accountability and enforcement in the UK. While Mastercard and Visa are powerful global players, the reality for smaller companies caught in fraudulent schemes or facing penalties for engaging with illegal sites could be very different.
As the Financial Conduct Authority (FCA) tightens its focus on financial services, it is important to consider the broader implications of non-compliance, both for businesses and consumers. If payment processors like Mastercard and Visa were to face significant fines or regulatory action for their role in facilitating transactions on illegal platforms, their deep pockets may allow them to shoulder the financial burden. But smaller companies and individuals who violate financial regulations or fall victim to scams may not be so fortunate.
For businesses, the cost of non-compliance can be crippling — including hefty fines, loss of consumer trust, and potential legal action. For consumers, losing access to funds, dealing with unregulated platforms, and struggling with the financial consequences of scams can be equally damaging.
What steps can you take to ensure compliance and avoid damaging consequences?
Proactive, systematic approaches to KYC, monitoring, training, and compliance management are essential for companies to prevent involvement in illegal activities and maintain trust with regulators, customers, and stakeholders.
VinciWorks offers comprehensive compliance solutions for financial services firms. Our FCA compliance solution allows compliance staff to gather all data and supporting documents in one centralised system. We also offer comprehensive training in AML and FCA compliance.
