The Gambling Commission has today (4 February 2021) announced that, following a review of the operating licence held by Aspers (Stratford City) Limited (“Aspers Stratford”) in relation to its Aspers Stratford City Casino in London, it has:
- issued a warning to Aspers Stratford for breaches relating to anti-money laundering processes, failing to comply with customer interaction rules and breaching cash desk policy rules,
- required Aspers Stratford to undertake a follow-up independent audit of its policies and procedures within six months to ensure improvements are effective, with the implementation of further recommendations if required by that audit,
- imposed a financial penalty of £652,500.00 (reduced from £1.8million after submission of representations and evidence by Aspers Stratford regarding its financial circumstances, particularly in light of the Covid-19 pandemic and measures), and
- obtained the agreement of Aspers Stratford to divest itself of gross gambling yield in the sum of £78,233.00 which it had accumulated as a result of its failings.
A personal tragedy lies behind imposition of this latest sanction in that the Commission first became engaged with Aspers Stratford following an inquest into the death by suicide on 12 November 2018 of a VIP customer (described below as ‘X’) who had last visited the casino on 11 November 2018. Aspers Stratford also launched its own immediate and urgent internal investigation that identified clear lessons to be learned to develop and improve its policies and procedures.
The Public Statement in this case (that you can download below) records that “the Commission recognises that Aspers has sought to rectify the failings identified during the review and implement all of the recommendations made by the Internal Report in relation to its Policies and Procedures”.
The Public Statement also sets out the following regulatory failings identified by the Commission:
Licence Condition 12.1.1 requires licensees to have in place appropriate policies, procedures and controls to prevent money laundering and terrorist financing, following and having regard to the risk assessment. It also requires it to review such policies and revise them as appropriate.
The Commission found weaknesses in Aspers policies, procedures, and controls to prevent money laundering. In relation to AML, the Commission found Aspers policies, procedures, and controls:
- could have been better in some important respects.
- could have been implemented more effectively, and there were weaknesses and shortcomings in relation to the putting into effect of its policies and procedures,
- were not adhered to in respect of X. For example:
- If they had been followed, X would not have been allowed to gamble without providing the enhanced due diligence (“EDD”) information which had been requested,
- Aspers failed to effectively monitor X as a customer and keep a record.
There was a risk of AML failures having occurred in relation to some customers other than X, although the Aspers believes the scale of the failures in relation to X were exceptional.
Social responsibility code provision 3.4.1 requires licensees to put into effect policies and procedures for customer interaction where they had concerns that a customer’s behaviour may indicate problem gambling, with specific provision for those designated as high value or VIP customers.
The Commission’s review identified weaknesses in Aspers social responsibility (SR) policies and procedures. The Commission found:
- Aspers policies, procedures and controls relating to SR could have been better
- A number of SR interactions required by Aspers policies and procedures were not always implemented effectively and there was not always sufficient review and oversight of the quality of SR interactions with customers, particularly when those interactions were cumulative in nature. Aspers considers insufficient resourcing may have been a contributory factor; and
- During his period of custom with Aspers responsible gambling interactions with X, as a VIP customer, did not always take place or were inadequate/not meaningful. There was a misguided assumption that X could afford the level of losses. There were failures in record keeping.
There was a risk of SR failures having occurred in relation to some customers other than X, although Aspers believes the scale of the failures in relation to X were exceptional.
Cash and cash equivalents
Licence condition 5.1.1 requires licensees to implement appropriate policies and procedures concerning the usage of cash and cash equivalents by customers. It also requires to ensure that such policies and procedures are implemented effectively, kept under review, and revised appropriately to ensure that they remain effective, and take into account any applicable learning or guidelines published by the Gambling Commission.
The Commission’s review identified weaknesses in the Aspers policies and procedures in relation to cash and cash equivalents in the following respects:
- it did not make any enquiries of X in relation to cash purchases of £46,920 and £51,000 on 2 and 3 September 2017 respectively placing too much reliance on X’s previous winnings,
- it failed effectively to implement its own policies, procedures and controls in relation to X’s gambling, allowing him to make cash purchases of £5,190, £5,660 and £6,100, in excess of the £5,000 limit in clause 5.4.1 of its AML policy, on 3 September, 5 September and 11 November 2018 respectively; and
- X’s cash purchases on 5 September and 11 November 2018 exceeded the £5,000 limit by virtue of his play on electronic roulette, highlighting the fundamental weakness in the Aspers’ loose cash policy, i.e. that it only applied to table games. The policy has since been extended to all forms of gambling at the casino, including electronic roulette and poker.
In terms of ‘good practice’ for other UK land-based casinos, the Gambling Commission goes on to state:
We consider this case provides valuable learning for licensees. You should take account of the failings identified in this case in planning and reviewing your own AML SR measures.
Licensees should consider the following questions:
- Have you ensured you have a clear, up-to-date, and fit for purpose Responsible Gambling Policy which takes into account the Commission’s guidance and includes a customer’s affordability?
- Do you have procedures and systems in place to identify customers who may be experiencing or at risk of developing problems with their gambling? the Commission’s guidance can be found here: http://www.gamblingcommission.gov.uk/PDF/Customer-Interaction-Formal- Guidance-Non-Remote-July-2019.pdf
- Do you have appropriate trigger points for when the usual pattern of gambling becomes unusual (these should not be just financial)?
- How do you protect new customers (where a pattern of play cannot yet be established)?
- Are your staff sufficiently resourced and trained to spot problem gamblers and know how to report concerns? Are there clear procedures once a concern has been raised?
- Have you ensured you have clear, up-to-date, and fit for purpose AML policies and procedures available to all who require guidance?
- Have you ensured your policies and procedures have been informed by our guidance on AML and staff understand how it is implemented?
- Have you taken into account the Commission’s Money Laundering and terrorist financing risk assessment? Guidance can be found here: http://www.gamblingcommission.gov.uk/PDF/AML/Prevention-of-Money- Laundering-and-Combating-the-Financing-of-Terrorism-5th-Edition.pdf
- Have you ensured your cash desk policies are sufficient to capture all elements of a customers’ play?
For further guidance on good practice read our ‘Enforcement report’ at https://beta.gamblingcommission.gov.uk/policy/raising-standards-for-consumers-compliance- and-enforcement-report-2019-20