Santander case highlights the offshore gambling challenge facing UK banks

Santander has been ordered to refund thousands in gambling losses by the UK ombudsman in a case highlighting the liabilities British banks face when handling gambling transactions. The complainant in a recent Financial Ombudsman Service (FOS) case, known only as Mr R, had made £25,000 from a house sale. He subsequently spent most of the sale proceeds on gambling despite having gambling blocks set up with the bank. A single fixed monetary sum has not been set for the refund. However, Santander has been told to refund all identifiable gambling losses, minus any winnings, incurred between 15 August-17 September 2025. This will not include £16,000 spent prior to 15 August, the date that Mr R disclosed to Santander that he was suffering from a severe gambling addiction and was in a downward spiral. On 17 September, Mr R took his case to the Ombudsman. The Ombudsman believes that Santander was not liable for this as prior to this date it saw no basis for the bank to intervene in Mr R’s transactions, while adding that the customer was responsible for setting his own restrictions prior to telling Santander about his gambling problem. Santander has also been told to add 8% interest on each gambling transaction made between 15 August-17 September and also pay £500 in compensation for distress and inconvenience caused to Mr R. Are gambling payment blocks fully effective? Every major bank in the UK offers its customers a gambling payment block. If set up, the service should prevent the customer from making payments to any gambling business, whether sports betting, online casino, bingo etc. This raises the question as to how Mr R was able to continue gambling despite having gambling blocks established even prior to when he informed Santander about his gambling addiction in mid-August 2025. The big catch here is this – the payment blocks apply to companies licensed and regulated by the Gambling Commission. With countless offshore casinos and sportsbooks accessible from the UK, or even actively targeting the country in some cases, this creates a problem. In Mr R’s case, the money gambled after the July sale of his house was all transacted with offshore companies. Even after Santander set up an international block on gambling transactions, Mr R claimed that he was still able to gamble. The incident shines a light on the hydra-like nature of the unlicensed .com gambling sector, with even major multinational banks like Santander seemingly struggling to prevent payment blocks to these sites. The Ombudsman’s decision also comes shortly after the publication of Gambling Commission data which suggests that people with a Problem Gambling Severity Index (PGSI) score of eight or more – a score Mr R almost certainly would have – are the most likely people to gamble with offshore platforms. Tackling payments is the number one way for the government, regulators and financial institutions to tackle the offshore, illegal market, and is something the government’s Illegal Gambling Taskforce established earlier this year is looking into. The use of gambling-block services was initiated by the neo-bank of Starling and Monzo in 2018 to allow customers to activate via mobile apps transaction declines to merchants identified as gambling licences. The use and activation of gambling-block services by banks was encouraged by the Gambling Commission and GambleAware as a further layer of protection for British consumers. GambleAware provided guidance to banks of the development of blocking apps/services via A Blueprint for Bank Card Gambling Blockers report – co-authored by the University of Bristol. Santander has offered its gambling block since mid-2019, joining other UK banks in introducing the safeguard. However, researchers have urged the Financial Conduct Authority (FCA) to address inconsistencies between services offered by banks, highlighting that some blocks initially allowed customers to switch off the service immediately. The FCA endorsed gambling blocks as valued practice, but has not endorsed researchers’ calls to apply specific universal blocks with a minimum 48-hour cooling-off period. No further guidance on gambling blocks for banks have been published since 2022. Who is responsible? However, the incident does also highlight another topic – that of individual responsibility. Making its case to the ombudsman, Santander disputed that it was liable to refund Mr R as it maintained it was his own decision and therefore his own responsibility for transacted with offshore platforms. Ultimately, the ombudsman disagreed with this – and it’s easy to see why, as the gambling block system is meant to prevent gambling in cases of vulnerable people like Mr R. But it does raise the question as to where individual responsibility fits into the wider and highly sensitive topic of problem gambling, gambling harm, and regulation of the industry.