The UK Gambling Commission released today a statement of the facts which had led to its enforcement actions against a land-based casino operator that already agreed to pay £450,000 ($612,000) for its failings.
Social Responsibility and AML Failures
Victoria Gate Casino (VGC), a brick-and-mortar gambling venue in Leeds, will pay the hefty sanction as part of a regulatory settlement with the Gambling Commission (GC) after it was found out to be in breach of social responsibility and anti-money laundering (AML) obligations under its operating license.
In the press release announcing the regulatory settlement, GC Executive Director Helen Venn outlined the regulator identified the failings as part of its ongoing efforts to raise industry standards. “All operators should be very aware that we will not hesitate to take action against those who fail to follow rules that are in place to make gambling safer and prevent it being a source of crime,” she asserted.
Further, Venn advised every gambling business to take a look at the way VGC identified and managed customers at higher risk of money laundering and gambling harm, stressing that “consumer protection should be an operator’s main priority.”
Breach of Operating License
Following a compliance assessment in July 2019, in which concerns related to how VGC handled ten customers were raised, the GC commenced a review of VGC’s operating license and found out the casino had breached conditions of its operating license due to failing to implement its AML and safer gambling policies and procedures.
In relation to social responsibility code provision (SRCP) 3.4.1, which deals with “policies and procedures for customer interaction” to help identify problem gambling, the regulator identified weaknesses in the casino’s gambling controls, as well as failure to “make use of all relevant sources of information to ensure effective decision making and to guide effective customer interaction, breaching paragraph 1(e)(i) of SRCP 3.4.1.”
Further, the regulator found the licensee to be in breach of license condition 12.1.1, which relates to the Prevention of Money Laundering and Terrorist Financing, as it requires these policies, procedures, and controls to be implemented effectively, reviewed and revised appropriately in line with GC’s guidance.
Examples of Failings
To affirm the reasoning behind its enforcement actions, the GC cited a case in which a customer incurred losses of £275,000 ($374,000) over 22 months before the licensee requested source of funds evidence and then relied on a tax account supporting an income lower than the loss, and considered as a source of wealth the fact that the customer was the main shareholder of a dormant company and that construction work at the firm’s premises was undertaken. Customer interactions, which had taken place, were not recorded and neither was the rationale behind the casino’s decisions.
No rationale was also recorded on another customer, who was allowed to amount a loss of £93,294 ($126,880) over 16 months, with numerous ‘no concern’ interactions stated on the customer’s profile. The missing rationale as to why these interactions had taken place was contrary to VGC’s customer interaction policy.
In addition, the customer was allowed to gamble for seven weeks after being asked to provide sources of funding within seven days without submitting copies of bank statements. Later, the origin of substantial payments to the customer’s bank account was not verified.
VGC cooperated with all inquiries throughout the investigation and accepted its failings the regulator noted while dishing the financial sanction consisting of £241,000 ($328,000) as divestment of the financial gain accrued as a result of the accepted failings, and £209,000 ($284,000) in lieu of a financial penalty. The casino will also have to pay GC’s investigation costs of £21,578.17 ($29,346).