UK regulator fines offshore online casinos over poor anti-money laundering controls
05 Dec 2018

The United Kingdom’s Gambling Commission has taken action against three online casinos following an investigation into how firms handle money laundering and problem gambling.

In its findings, the Commission highlighted a number of compliance failings across the firms.

“Nearly £14m in penalty packages will be paid by three companies as [a] result of their failings to put in place effective safeguards to prevent money laundering and keep consumers safe from gambling-related harm,” the watchdog said.

Daub Alderney

The regulator said it had ordered Guernsey-based Daub Alderney to pay a £7.1m fine for failing to follow rules aimed at preventing money laundering and protecting vulnerable consumers.

The gambling firm will also have extra conditions placed on its licence to provide gambling to consumers in Britain, the Commission said.

Commission officials found that Daub Alderney did not apply, on a risk-sensitive basis, sufficient enhanced customer due diligence measures and enhanced ongoing monitoring in situations which could present a higher risk of money laundering.

It also found that the firm failed to keep full records of the evidence and supporting documents it considered as part of its customer due diligence checks and business relationship with the customer.

Daub Alderney also did not provide relevant staff with regular training on how to recognise and deal with transactions and other activities which may relate to financial crime.

Casumo

In its assessment of Malta-based Casumo Services Limited, the Commission found that its anti-money laundering (AML) policy did not appear effective when it came to establishing the source of funds and ongoing monitoring of its customers. There was also no evidence of sufficient enhanced customer due diligence (EDD) for two customer accounts.

In issuing Casumo with a £5.85m penalty, the Commision stated that “at the time of the assessment it did not have an appropriate AML risk assessment in place, effective AML policies, procedures and controls in place, particularly as regards higher risk customers and an effective or sufficient training in place for it MLRO.”

Videoslots

The Commission also announced that Malta-based Videoslots was ordered to pay £1 million in lieu of a financial penalty.

Among its findings, Commission officials stated that at the time of the assessment they found that Videoslots “conducted only basic checks on all customers, supported by a verification process once a deposit level of 2,000 Euros was reached in a 24-hour period.”

Videoslots also failed to establish and maintain appropriate risk-sensitive policies and controls relating to the management of its customers to prevent financial crime.

Its AML policies ‘did not sufficiently define risk situations’ where enhanced customer due diligence would be required,’ the Commission explained.

In addition, ‘the EDD process did not always include establishing the source of funds/source of wealth, as appropriate.’

In an emailed statement, Videoslots said: “We confirm that Videoslots has agreed a regulatory settlement with the Gambling Commission of Great Britain to conclude a review of our operating licence.”

It added that it accepted that there were “weaknesses in our systems relating to how we managed our customers for anti-money laundering and social responsibility purposes.”

Daub Alderney and Casumo did not respond with comments by press time.

Commission CEO Neil McArthur said he hoped that the announcement [of the actions] 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.”

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