The UK Gambling Commission (UKGC) revealed it has imposed a £450,000 fine on a casino operator following a probe that found the operator failed to comply with social responsibility and anti-money laundering rules.
As announced by the Commission, VGC Leeds Limited, trading as Global Gaming Ventures, is set to pay the fine as part of a regulatory settlement that was agreed by the watchdog and the company.
The Executive Director of the UKGC, Helen Venn, explained there were failures in the way the business identified and managed customers who were at higher risk of participating in money laundering activities or suffering from gambling-related harm. She said that the failings had been identified as part of the gambling regulator’s ongoing drive to raise standards across the UK gambling industry.
Ms Venn noted that consumer protection should be among the paramount objectives of every gambling company operating in the UK, so all businesses should be aware that the Gambling Commission would not hesitate to take action against the ones who fail to follow rules aimed at making the local gambling sector a safe place for customers and prevent it becoming a source of crime.
Gambling Regulatory Probe Finds Several Instances of AML and Social Responsibility Failings
As mentioned above, the latest regulatory case concerns VGC Leeds Limited, trading as Victoria Gate Casino, which currently holds a non-remote casino operating licence, as well as a supplementary remote casino operating permit.
The UK Gambling Commission revealed that it investigated the actions of the company while handling 10 customers after some concerns with its operations were identified at a compliance assessment in July 2019. The probe that was carried out by the UKGC identified shortcomings in the way the Victoria Gate Casino identified and managed customers at higher risk of gambling-related harm and money laundering – a problem that originated from the operator’s failure to effectively implement its safer gambling and anti-money laundering gambling policies.
On October 24th, 2019, the company received notice that the UKGC was starting a review of its operating licence. The gambling operator cooperated during the enquiries throughout the probe but the investigation revealed breaches in its operating licence. Victoria Gate Casino has accepted that it failed to comply with safer gambling and anti-money laundering conditions of its operating licence in the period from January 2017 to July 2019.
As the UK gambling regulatory body announced, the company will pay £241,000 representing divestment of the financial gain it had as a result of the aforementioned failure, as well as £209,00 instead of financial penalty. VGC will also pay over £21,500 to the UKGC to cover its investigation costs.
Several Instances of Anti-Money Laundering Protocol Failures Found at VGC
Under its licence condition 12.1.1, Victoria Gates Casino is required to implement effective anti-money laundering (AML) and terrorist financing controls. During the investigation, the UKGC identified that the company had failed to undertake sufficient measures to make sure it verified the customer funds’ underlying source in some instances.
The Gambling Commission revealed two instances of anti-money laundering failures of the operator.
One customer lost a total of £275,000 over a period of 22 months before VGC asked them to present evidence of their source of funds. At the time when the customer finally presented the required source of funds information, it became clear that the figure did not support the affordability of their losses.
Another customer lost a total of £93,294 on their account since registering with the gambling company in February 2017. In March 2018, the operator asked them to provide proof of their source of funds within 7 days. Even though the customer did not present the required SoF until 7 weeks later, the company permitted them to continue gambling at VGC’s premises throughout that period. The origin of the funds was not verified. Furthermore, the customer had generated several wins but it was unclear what they had done with the money and whether they had withdrawn the funds or used them to gamble. The casino operator addressed the customer eight months later, asking them to submit documents associated with an annual review. The customer visited the VGC’s premises about a week later but did not hand in the required documentation and it remains unclear whether and if yes, when, the documents were submitted.
Victoria Gate Casino has accepted there were shortcomings and weaknesses related to the implementation of some of its AML controls and procedures.
UKGC Finds VGC’s Failures to Stick to Its Social Responsibility Code
Under provision 3.4.1 of the Social Responsibility Code at the time it was in place, gambling licence holders in the UK are required to adopt customer interaction policies and procedures. The policies must include a specific provision to make use of all relevant sources of information in order to ensure safe customer behaviour and to deliver effective customer interactions. This involves particularly a provision to identify customers who are considered at risk of being affected by gambling-related harm even though they may not be displaying obvious signs of problem gambling.
The Gambling Commission revealed two instances when the company failed to identify customers at risk of gambling-related harm in violation of the Social Responsibility Code provision 3.4.1.
The first customer, who incurred £275,000 worth of losses over 22 months, was not required to present information regarding their source of funds. When the operator finally sought the necessary documentation, it became clear that the customer’s income was not enough to support the affordability of his losses. Also, although the VGC had regular interactions with the customer, it failed to record these interactions and its rationale for decisions on the customer’s profile as it is required to do under the provisions of its policy.
In terms of the other customer, whose losses totalled £93,294 over 16 months since they created their account in February 2017, the company recorded numerous “no concern” interactions on their profile. However, VGC did not record any rationale as to why the customer interactions were undertaken in the first place under the operator’s own policy.
Victoria Gate Casino agreed there were weaknesses in its safer gambling controls, as it had not managed to implement its customer interaction policies and procedures effectively. Also, the gambling licence holder failed to make use of all relevant sources of information to properly guide customer interactions and to ensure an effective decision-making process.
- Author
Olivia Cole
