Gambling Commission gets tough on money laundering

The gambling regulator has taken action, including imposing nearly £14m in penalties, against online casino companies and their senior management, as part of an ongoing investigation into the way the industry combats money laundering and problem gambling

The Gambling Commission has ordered Daub Alderney to pay a financial penalty of £7.1m for failure to heed money laundering regulations among other breaches of its regulations.

Remote gambling site Casumo was found not to have an effective anti money laundering policy at the time of a compliance visit, with no ongoing monitoring of customer accounts. It also lacked effective procedures and controls as regards higher risk customers.

Casumo has been ordered to pay a financial penalty of £5.85m while another Malta-based operator, Videoslots, will pay £1m in lieu of a financial penalty.

Videoslots was found to have failed to establish and maintain appropriate risk-sensitive policies, procedures and controls relating to the management of its customers (including the monitoring and management of compliance with such policies and procedures) to prevent money laundering and terrorist financing.

In one example cited by the regulator, a customer failed automated identity checks, resulting in the customer providing Videoslots with a fraudulent driving licence as evidence of their identity. In the initial stages this was not detected by Videoslots.

The customer was then able to register multiple fraudulent bank cards, which was initially not detected.

The bank cards were used to deposit and play large amounts of funds (for example £6,000 in one day in September 2017) without intervention by the operator. Videoslots’ systems did, in due course, alert them to the activity, by which time the customer had made £17,405 in deposits, suspected to be the proceeds of crime.

Another company - CZ Holdings - will no longer be able to provide gambling services to consumers in Britain as it surrendered its licence after a licence review had been commenced. Nine other operators have been issued with advice to conduct letters and a further six are still under investigation.

The Commission has also taken regulatory action against the individuals responsible for the failings. Three personal licence holders (PML) have now surrendered their licenses, four have been issued with a warning and two have been issued with advice as to conduct notices. A further three individuals who hold PMLs are still under investigation.

Neil McArthur, Gambling Commission CEO, said: ‘I hope today’s announcement will make all online casino operators sit up and pay attention, as our investigations found that a large number of operators and their senior management were not meeting their obligations.

‘We expect operators to know their customers and to ask the right questions to make sure they meet their anti-money laundering and social responsibility obligations.’

Jeremy Wright, secretary of state for Digital, Culture, Media and Sport, said: ‘There are robust requirements to safeguard players and prevent money-laundering which all businesses must adhere to if they wish to operate in the British market. I am pleased to see the Gambling Commission taking the strongest possible action when companies fail to meet their obligations.’

Report by Pat Sweet

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