The UK Gambling Commission announced today that it has taken “widespread action” against numerous online casino operators and senior management as a part of an investigation into failings to address problem gambling and money laundering.
In a notice published on the UKGC website, the Commission stated it has fined three online casinos nearly £14 million in aggregate for not taking adequate measures to prevent problem gambling and money laundering. The three sites cited for these failures and their fines are as follows:
- Daub Alderney (operates 8 casino sites): fined £7.1 million
- Casumo: fined £5.85 million
- Videoslots: ordered to pay £1 million to the National Responsible Gambling Strategy in lieu of a financial penalty
Additionally, CZ Holdings (which operated the now-defunct Dr Vegas online casino) has been stripped of its UK gambling license. The UKGC has also announced that nine other online casino operators have been issued Advice to Conduct letters and a further six operators remain under investigation.
The UKGC has also taken actions against multiple individuals employed in the online gaming industry. Three people have surrendered their Personal License Holder permits, four people have been issued a warning and two more have been issued Advice as to Conduct notices. Three additional people remain under investigation.
Daub Alderney Fined £7.1 Million
Online casino operator Daub Alderney faces the biggest fine of the bunch with £7.1 million paid as a financial penalty for failing to prevent money laundering and not doing enough to protect customers showing signs of problem gambling.
The UKGC has also placed additional terms on the firm’s operating license in the UK. These additional terms include having Daub Alderney hire a qualified Money Laundering Reporting Officer, provide additional anti-money laundering training to staff, continue to review the effectiveness of its anti-money laundering and social responsibility programs and then to hire a UKGC-approved auditor to examine the review and report its findings to the UKGC.
These penalties were imposed at the conclusion of a long-running investigation in which the UKGC found that Daub Alderney had failed to conducted sufficient Source of Funds (SOF) checks on 742 customers, did not provide staff with sufficient anti-money laundering training and failed to follow up on self-exclusion requests from numerous customers.
Daub Alderney operates eight online gaming sites in the UK:
- Lucky VIP Casino
- Give Back Bingo
- Regal Wins
- Magical Vegas
- Spin and Win
- Bingo Extra
- Lucky Pants Bingo
- Kitty Bingo
Casumo Fined £5.85 Million
Casumo’s £5.85 million fine was levied by the UKGC for failing similar to those of Daub Alderney. In short, Casumo was found not to have adequate anti-money laundering policies, failed to act on signs of problem gambling among customers and did not conduct appropriate SOF checks on other customers.
The UKGC noted that Casumo has since taken measures to address the Commission’s initial report, but it has still imposed additional licensing conditions on the operator. Like Daub Alderney, Casumo must appoint a Money Laundering Reporting Officer, provide additional training to key employees and hire an external auditor to monitor Casumo’s ongoing review of internal practices.
Videoslots Agrees to Pay £1 Million
Videoslots.com managed to avoid paying a financial penalty to the UKGC, but still finds itself on the hook for £1 million that will be paid to National Responsible Gambling Strategy projects that conduct research and treatment related to problem gambling.
This payment came about as a result of UKGC findings that Videoslots for not having appropriate policies in place to detect problem gambling and money laundering. The UKGC noted in particular that Videoslots only conducted basic customer checks once customer had deposited €2,000 or more in a 24-hour period, did not properly identify risky behavior and in some cases failed to conduct SOF checks.
The UKGC pointed to two customers in particular who managed to get away with suspicious activity before Videoslots.com took notice.
One customer deposited more than £211,000 and lost roughly £45,000 shortly thereafter. The UKGC noted that initial checks conducted by Videoslots revealed the customer had an overdrawn bank account but failed to conduct enhanced due diligence on that customer.
A separate customer also managed to make £17,405 in deposits after signing up for a Videoslots account with a fraudulent driving license and making deposits with fraudulent bank cards. Videoslots did eventually catch the customer, but the UKGC was not satisfied with the amount of money the customer managed to deposit before Videoslots took notice.
UKGC Continues Cracking Down
Today’s actions by the UK Gambling Commission are just the latest in a string of major fines and regulatory actions taken against licensed UK casinos over the past 18 months.
Some of the bigger fines to be levied in recent times include £6.2 million levied against William Hill, £7.8 million against 888.com and £2.2 million against Paddy Power Betfair – all related to money laundering practices and responsible gambling concerns. Earlier this year, 32Red was fined £2 million for failing to protect a single customer who showed signs of a problem gambling.
The Gambling Commission also warned the industry back in August that operators should remove unfair withdrawal conditions or face regulatory action. On that subject, the Competition and Markets Authority (CMA) notified the Gambling Commission that an investigation has revealed numerous issues among licensed operators such as:
- Unreasonably low daily, weekly and monthly withdrawal limits
- Arbitrarily short time deadlines on how quickly customers must verify their identity before facing the risk of having their funds confiscated
- Unfair dormancy terms under which casino sites may confiscate account balances if customers have not been active for some amount of time
It is surely only a matter of time before the UKGC takes action against even more operators for issues related to problem gambling, money laundering, advertising, withdrawals or maybe even an entirely new category of offense. It probably doesn’t need to be said yet again, but UK casinos should proceed with extreme caution.