What happened?
The UK Gambling Commission (UKGC) has imposed a £6m penalty on Gamesys, an online gambling operator that runs 16 websites such as ballycasino.co.uk, doublebubblebingo.com, jackpotjoy.com and megawayscasino.com. The fine was issued after an investigation revealed that Gamesys had failed to comply with its social responsibility and anti-money laundering (AML) duties.
The investigation was launched in May 2022, following a compliance assessment by the UKGC. The regulator found that Gamesys had not always identified customers at risk of experiencing harms associated with gambling, such as placing inappropriate reliance on checks that indicate whether a customer had a history of financial problems or bankruptcy. The regulator also found that Gamesys had not always interacted with customers who may be at risk of or experiencing harms associated with gambling, such as recommending new games and promotions or providing responsible gambling support. Moreover, the regulator found that Gamesys had not always recorded its interactions, considerations and rationale for decisions in sufficient detail, despite this being specified in its responsible gambling procedures.
On the other hand, the investigation also revealed that Gamesys had failed to conduct adequate customer due diligence and to be over-reliant on third-party information or the customer’s verbal assurances for some customers. The regulator noted that some customers were able to evade some of the licensee’s AML triggers and thresholds and go on to spend significant sums without AML checks being conducted. For example, one customer deposited £14,585 in 28 weeks, another deposited £18,884 in over six months and another deposited £34,280 in five and a half months. The regulator also found that Gamesys had an ineffective ‘Reinvestment of Winnings’ policy, which is an AML due diligence safeguard necessary to mitigate the risk that deposited funds could be from illegitimate sources and not just from previous winnings.
What are the consequences?
As part of the settlement, Gamesys will have to undertake a third-party audit to ensure it is effectively implementing its anti-money laundering and safer gambling policies, procedures and controls. The audit will be carried out by an independent auditor approved by the UKGC within six months of receiving notice of the decision. If Gamesys fails to comply with the audit findings or any other requirements imposed by the UKGC as a result of this decision, it may face further enforcement action.
The UKGC said that it takes its responsibility extremely seriously to ensure that operators are employing policies and procedures which make gambling fair, safe and crime-free. It said that whenever it finds failures in policies and procedures then the business can expect significant regulatory action.
How did Gamesys respond?
Kay Roberts, Executive Director of Operations at Gamesys said: “We are disappointed with this decision but we accept it fully. We have already taken steps to address these issues internally and we are committed to working closely with our regulators to ensure we meet their expectations.”
Roberts added: “We remain focused on providing our customers with a great gaming experience across our brands.”
What does this mean for other online operators?
This decision shows that online operators are subject to strict regulatory scrutiny by the UKGC when it comes to their social responsibility and AML obligations. It also shows that online operators can face hefty fines if they fail to comply with these obligations or if they engage in any fraudulent or illegal activities involving their customers’ funds.
Therefore, online operators should ensure that they have robust policies and procedures in place to prevent harm from gambling addiction among their customers. They should also conduct regular customer due diligence checks and monitor their transactions for any suspicious patterns or anomalies. Moreover, they should implement effective measures to protect their customers’ funds from money laundering risks such as using secure payment methods or third-party providers.
Online operators should also be aware of their legal obligations under different jurisdictions where they operate or target their customers. They should comply with all applicable laws and regulations regarding responsible gambling practices across these jurisdictions.
Online operators should also keep themselves updated on any changes or developments in the regulatory environment regarding social responsibility and AML issues. They should seek professional advice if they have any doubts or questions about how they can meet these requirements.