AML and customer interaction failings revealed as background to PTES operating licence surrender

The UK Gambling Commission has today published on its website the findings of its investigation into Playtech subsidiary company, Isle of Man-based PT Entertainment Services Limited (“PTES”) that, until the surrender of its operating licence during the course of that investigation, traded as and

Notwithstanding surrender of the licence, the Commission decided that it was in the public interest to complete its investigation into PTES and publish its findings.

Today’s announcement states that the Commission’s investigation:

  • revealed systemic anti-money laundering (“AML”) failings (between October 2016 and September 2017) and social responsibility (“SR”) failings (between May 2015 and September 2017) that, had the operating licence not been surrendered, would have resulted in imposition of a £3.5million financial penalty and consideration by the Commission of other additional sanctions;
  • concluded that PTES had:
    • failed to carry out any responsible gambling customer interactions with a 25 year-old male customer, even though it was aware that several of his debit card transactions had been declined and
    • provided him with VIP status without verifying that he could afford to spend the amounts of money he was playing with; and
  • revealed more general failings in the way PTES interacted with its highest spending customers, including:
    • responsible gambling triggers that required a customer to be active for between two and six months, leaving customers exposed when gambling for shorter periods,.
    • the absence of specific provision for VIP customers and “a clear lack of policy and training given to staff on how to manage so-called VIP relationships and minimise harm”.

A tragic background to the above-mentioned circumstances has been revealed by the following comments made today in relation to this matter by the Gambling Commission CEO, Neil McArthur:

This is a tragic case which came to light after I was contacted by the family of the young man who very sadly took his own life.  I want to thank them for their bravery in bringing his case to our attention and we are grateful for the way they have worked with us in such terrible circumstances so that we could understand what happened.

Although PTES has ceased trading we decided to complete our investigation and publish our findings, as the lessons from this tragic case must be learned by all operators. Our investigations into the role played by key individuals at PTES are continuing. As such, it would be inappropriate to say more about the specific case at this time.

This case – like so many others we have seen – illustrates why the management of so-called ‘high value customers’ has to change.  Operators must do everything in their power to interact with customers responsibly. We will shortly be opening a consultation to make permanent changes to the way operators recruit and incentivise high value customers.

The Public Statement published by the Commission (that can be downloaded below) also states that:

Prior to surrender of its operating licence, PTES made a number of financial settlement offers which the Commission regarded as seriously deficient. PTES proceeded to donate £619,395, the amount it proposed as a regulatory settlement offer on 30 October 2019, to charity in furtherance of the National Strategy to Reduce Gambling Harms.

Playtech, its parent company, has also pledged to donate a total of £5 million to mental health and gambling-related harm charities over the next five years as part of its strategy to promote better online health.

Arising from today’s announcement, the Gambling Commission is reminding its licence-holding operators to consider the following questions when reviewing their own AML and SR measures:

  • Do you have an effective VIP framework that ensures the bonuses and incentives are offered in a manner which is consistent with the licensing objectives?
  • Are your policies and procedures for identifying high risk customers for AML and SR being implemented effectively to safeguard customers?
  • Do you give equal consideration when interacting with customers in respect of potential AML breaches and SR breaches?
  • Do you conduct problem gambling interactions regardless of whether a customer is a winning customer or not?
  • Is your AML policy clear that when a winning customer withdraws their winnings and later gambles there is still a requirement under The Money Laundering, Terrorist Financing and Transfer of Funds (Information of the Payer) Regulations 2017 to conduct ongoing monitoring? There should not be an assumption that the money relates to previous winnings.
  • Is your money laundering and terrorist financing (MLTF) risk assessment in line with the 2017 Regulations and the Commission’s ‘The prevention of money laundering and combating the financing of terrorism – Guidance for remote and non-remote casinos Fifth edition (January 2020)’?