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Gambling Commission Scores Hat Trick: Fines 3 Companies £14 Million

Logo of the UKGC

The United Kingdom Gambling Commission (UKGC) has never been shy about slapping huge penalties on gaming operators that it believes have broken the rules – especially when it comes to money laundering, possible terrorist financing, and customer protection weaknesses. In November 2018, however, the regulatory body seemed to kick into overdrive, issuing big fines against three online gambling firms for a total of almost £14 million: £7.1 million on Daub Alderney, £5.85 million on Casumo, and £1 million on VideoSlots.com. A fourth company, CZ Holdings, had to surrender its license after review.

UKGC Fines Three Companies Eight Figures

About the Decisions

Blue Button

While the UKGC has a role to play in keeping online casino, sports betting, and poker sites safe places for British consumers, it's possible that it may have gone overboard. The Nov. 29 statement on the Gambling Commission's website about the recent enforcement decisions is entitled, ”Gambling Commission takes widespread regulatory action against online casino operators and senior management.” It is just us, or does this wording make it seem that the Gambling Commission is inordinately proud of this use of its powers and insufferably pleased with itself?

Be that as it may, senior government leaders have praised the UKGC for its punitive approach. The Secretary of State for Digital, Culture, Media, and Sport Jeremy Wright 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.”

Photo of Jeremy WrightJeremy Wright Is the UK's Secretary of State for Digital, Culture, Media and Sport

Meanwhile, the CEO of the Gambling Commission, Neil McArthur, expressed his desire that the recent announcement “will make all online casino operators sit up and pay attention.”

Daub Alderney

Daub Alderney Logo

The Gambling Commission had actually announced the steps it took against Daub Alderney in a previous statement dated Nov. 13. However, the drafters of the more recent text couldn't help but bring up this matter again, seemingly just to remind the public at large that the UKGC is not an organization to be trifled with.

Daub Alderney claims to have more than 100 online casino, slots, and bingo brands, including Kitty Bingo and Lucky VIP Casino. At the center of its failings lie its inability or unwillingness to live up to its responsibilities to counter money laundering and terrorist financing as stipulated in regulations enacted in 2016.

Brands Under the Daub Alderney UmbrellaSome of the Brands in the Daub Alderney Portfolio

In June and July 2017, officials of the Gambling Commission conducted a corporate audit of Daub Alderney. They found that the licensee failed to properly monitor its business relationships with other entities, was lax in performing due diligence on customers with a higher risk of money laundering, didn't keep adequate records of the due diligence it had performed, didn't train staff members on how to deal with suspicious transactions, and hadn't implemented policies specifically tailored to combating money laundering.

Furthermore, Daub Alderney's user self-exclusion features had bugs that allowed 73 gamblers to keep playing even after they asked that their accounts be suspended. These customers were able to deposit £17,830.33 after they had requested self-exclusion.

The firm refunded these deposits. In addition, it modified its practices to better discharge its obligations to counteract money laundering and terrorist financing following the audit as noted by the UKGC in its ruling. Nevertheless, Daub Alderney was levied a financial penalty of £7.1 million.

Casumo

Casumo Logo

Casumo is an online casino that's based in Malta and licensed by the MGA. In 2015, it obtained licensure from the UKGC too so that it could trade legitimately with U.K. customers, which is why it's subject to the mandates of the UKGC.

Casumo Website ScreenshotWebsite of Casumo

Casumo was found to have breached its license terms in a similar way as Daub Alderney, possessing inadequate anti-money laundering and -terrorist financing protocols. Also, its responsible gaming endeavors were insufficient. The UKGC pointed out three cases involving account holders who demonstrated the symptoms of gambling addiction. In none of these instances did Casumo's systems and employees flag their behavior as warranting extra attention.

For these sins and others, Casumo was punished to the tune of £5.85 million.

VideoSlots

VideoSlots Logo

VideoSlots.com is an internet casino that prides itself on the variety of its game selection. Besides the slots that its name implies, it also has blackjack, roulette, video poker, and all the other typical casino standbys. Its website boasts that there are more than 2,000 casino titles for players to choose from.

VideoSlots.com WebsiteSome of the Games in the VideoSlots Collection

This business similarly neglected to conduct the proper investigations needed to fight against money laundering and terrorist activity. In VideoSlots' case, this was especially egregious because the only checks the company generally performed on customers was an identity verification once they had reached a total of £2,000 in deposits during a 24-hour period.

Its social responsibility performance was also poor. One individual was able to deposit £211,000 using an overdrawn bank account. Another customer used fake ID and bogus bank cards to deposit £17,405 – suspected to be the proceeds of crime – before the deception was uncovered. Yet another user made deposits amounting to £412,000 over a nine-month period, and VideoSlots made no inquiries into either the source of these funds or whether the customer had a gaming problem.

VideoSlots was penalized to the tune of £1 million, which includes a divestment of £310,478.08. The firm will also have to hand over £12,000 to cover the Commission's investigative costs. This may seem like peanuts compared to the sums demanded from Daub Alderney and Casumo, but the UKGC noted that VideoSlots was unusually transparent and forthcoming about its various shortcomings, which probably weighed in its favor when the time came to decide upon the fine.

CZ Holdings

Question Mark

Not much info is publicly available regarding CZ Holdings, the enterprise that surrendered its gaming license. We do know that it ran the troubled DrVegas casino, which has been accused in the past of slowpaying winners. DrVegas closed down in June 2018, so it's no surprise that its parent organization elected to forfeit its gaming license. It's not exactly clear from the UKGC's statement whether a review of this corporation uncovered any information that perhaps convinced it to surrender its license, but this is possible particularly given its history of slow payments.

Personnel Not Excluded

Man With Question Mark Over Face

On top of issuing judgments against gambling concerns, the UKGC also sometimes goes after individuals. You see, key executives at online gaming outfits must be approved of by the Commission, and they hold what are known as personal management licenses (PMLs).

Without revealing any names, the UKGC has stated that three PMLs have been forfeited while four PML holders have received warnings. Two people with PMLs have been given “Advice as to Conduct” notices.

Rather than taking a breather after laying down the law, the UKGC has more irons in the fire. Nine licensed companies have been handed Advice as to Conduct notices, and six sites are in the process of being investigated. Three people with PMLs are under investigation too.

UK Regulatory Climate

Flag Map of United Kingdom

The United Kingdom is fast making a name for itself as a tough market for online gaming. This used to not be the perception of the country, but that all changed once the Gambling Commission was set up in 2014.

Since then, it has been tightening up the rules surrounding gambling, especially remote gaming, and fining violators astounding sums. 888 had the dubious honor of attracting the largest UKGC fine ever in August 2017 when it was docked £7.8 million for customer protection deficiencies.

Most of the enforcement measures of the UKGC appear to involve social responsibility and money laundering failings, but the Commission does take notice of other matters too, like when it chastised Tabcorp for offering an unusual prop bet that the authorities believed may have motivated an athlete to act improperly.

Other regulators in the United Kingdom also have jurisdiction over certain doings of gaming firms. Take, for instance, the Advertising Standards Authority, which in April 2018 ordered PokerStars to stop showing an ad that allegedly encouraged reckless gambling. PokerStars has also come under the scrutiny of the Competition and Markets Authority, which in July 2018 blocked the merger of the Stars Group and Sky Betting and Gaming although the deal was given the go-ahead to proceed in October.

UK Regulatory OrganizationsSome of the Regulatory Bodies With Jurisdiction Over U.K. Gambling

Other Jurisdictions More Appealing?

Globe

The regulatory burdens placed on online gambling sites by the UK's leaders have left many of them wondering if they would not be better off obtaining licensure elsewhere. Malta is an attractive destination with a solid history of gaming regulation. This island's appeal was further enhanced by its new Gaming Act, which streamlined the licensure process, and its various initiatives to support crypto-currency.

Sweden is another jurisdiction that's making waves in the internet gambling business. It's a new entrant on the gambling licensure scene, having only just begun to allow international online poker, casino, and betting houses to obtain licenses. This Nordic country's reasonable taxation structure and operator-friendly rules have enticed more than 75 companies to seek Swedish gaming licenses.

Unlicensed Gaming Also Possible

Cards and Chips

All the cumbersome compliance overhead caused by the UKGC and its fellow government watchdogs only affects properly licensed entities. Online wagering services that eschew UK licensure have no reason to obey the dictates of regulators. Because they're headquartered in offshore locales, the UK government often has no effective methods for bringing them to heel.

Sportsbetting.ag is one of these unlicensed offshore gaming sites that transacts on the British market without the blessings of the Gambling Commission. It has a casino, sportsbook, poker room, and several other gambling products. New poker players are eligible to claim a 100% up to $1,000 deposit bonus. To learn more about this operation and find out if it's right for you, browse over to our Sportsbetting Poker review.



This post first appeared on Professional Rakeback, please read the originial post: here

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Gambling Commission Scores Hat Trick: Fines 3 Companies £14 Million

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