£1.8m fine and additional licence conditions imposed on UK casino operator for AML and customer interaction failings

The Gambling Commission has today published a Decision Notice (a copy of which can be downloaded below) following a review, under section 116 of the Gambling Act 2005, of the operating licence held by London casino operator Silverbond Enterprises Limited trading as Park Lane Club. The Commission’s announcement (that can also be downloaded below) relating to the Decision Notice reads as follows:

A land-based casino has received a £1.8m fine, an operator licence warning and had additional conditions added to its licence for social responsibility and money laundering failings.

Silverbond Enterprises Limited received the penalties following a Gambling Commission investigation into its Park Lane Club in Mayfair.

Social responsibility failings included not recognising the indicators of potential problem gambling such as a customer displaying violent behaviour which included threatening staff and damaging of property, a customer asking for his winnings to be transferred to his personal bank account to prevent him playing further, and a customer of the casino asking to increase the maximum amount that could be deposited by cheque.

Money laundering failings included the operator’s compliance procedures not detailing how anti-money laundering policies were to be implemented and failing to carry out enhanced due diligence on 61 customers.

Two personal management licence holders at Park Lane Club have also received formal warnings and informed they must improve their record on protecting players and preventing money laundering.

In relation to the above-mentioned warnings given to the two PML holders, relevant excerpts from the register of “Personal licences – regulatory decisions” can be downloaded below.

In terms of learning to be derived from this latest in an ever-increasing series of enforcement actions by the Commission for AML and customer interaction failings, the Decision Notice lists a number of (1) aggravating and (2) mitigating factors to which it had regard when considering an appropriate resolution to its investigation, namely:

  • Aggravating factors
    • The duration of the breach was over 17 months
    • The operator failed to take note of Commission statements which highlighted similar breaches at the time of their failings
    • Repetition of breaches previously identified to the operator by the Commission, with an additional licence condition imposed which was then not adhered to
    • The breach continued after problems were identified with AML following inspections
    • The scale of the breaches were such that following a review by the operator 61 customers were found not to have adequate EDD
    • The impact on customers was significant and included a failure to identify PEPs or customers at risk of problem gambling.
  • Mitigating factors
    • Silverbond has now put in place additional resources concerning AML to support the current MLRO
    • Silverbond has taken steps to remedy the breaches and has outlined work it has undertaken
    • Silverbond has fully cooperated with the Commission’s investigation
    • There is no evidence of any attempts to conceal the breaches.

In terms of good practice, the Commission recommends that gambling operators should (1) take account of the failings identified in the investigation into Silverbond Enterprises Limited to ensure industry learning and (2) consider the following very same questions that it set out in a Public Statement, published in July 2019, following imposition of a £5.9million financial penalty in respect of past AML and social responsibility failings by Ladbrokes Coral Group:

  • Are your policies and procedures for identifying high risk customers for AML and SR effective
  • Have you adequately resourced your AML and SR departments, so your staff are able to put your policies and processes in place for all customers at all times? 
  • Are you recording all customer interactions, including decisions not to interact with customers, and are these records available for colleagues to refer to when making decisions?
  • Are your customers providing documentation to support their level of spend and loss, and not simply giving verbal or email assurances, for example?

NOTE: As recorded in the above-mentioned Decision Notice, this was the second review of the operating licence held by Silverbond Enterprises Limited. The first review, commenced on 26 February 2016, resulted in a Decision Notice being published in June 2016 and the addition of further licence conditions to address failings to comply with Money Laundering Regulations 2007. A copy of that first Decision Notice can also be downloaded below.