Platinum Gaming Limited (part of the Kindred Group), is the latest online gambling operator to incur, by way of a regulatory settlement, a substantial financial penalty – in its case £1.6million – for failing to identify gambling harm and to prevent money laundering.

The Gambling Commission’s announcement to this effect follows just one day after Gamesys (Gibraltar) Limited incurred a penalty of £1.2million for AML and social responsibility failings. However, in the case of Platinum Gaming, actual money laundering by a VIP customer occurred.

The Public Statement setting out the terms of the Platinum Gaming regulatory settlement can be downloaded below. Announcing this, the Commission states as follows on its website:

The Gambling Commission launched an investigation following reports that a convicted fraudster had spent £629,420 of stolen money with Platinum Gaming.

During Commission enquiries it was revealed the customer’s deposits were so high and losses so significant Platinum Gaming should have considered refusing or barring service to the customer. Instead the operator continued to allow the customer to gamble.

Investigations also revealed the operator breached anti-money laundering regulations, including a failure to make adequate enquiries about the source of the funds the customer used to gamble.

As part of a settlement with the Commission, Platinum Gaming returned £629,420 to the fraudster’s victims and will pay £990,200 in lieu of a financial penalty. This money will be spent accelerating delivery of the National Strategy to Reduce Gambling Harms.

Richard Watson, Gambling Commission Executive Director, is reported as saying:

There were weaknesses in Platinum Gaming’s systems and as a consequence, more than half a million pounds of stolen money flowed through the business. This is not acceptable and I would urge all operators to carefully read this case and learn lessons so they don’t make the same mistakes. This is yet another example of us taking firm action against online operators who fail to protect consumers or implement effective safeguards against money laundering. We must see the industry stepping up and providing consumers in Great Britain with the safest and fairest gambling market in the world.  Where we continue to see failings, we will continue to take action.

The Commission is advising both remote (online) and non-remote gambling operators to consider the following questions to address the issues identified in this latest case:

1. Do you conduct appropriate assessments of the risks of money laundering and terrorist financing for your businesses? Do you implement policies, procedures and controls which manage the identified risks effectively?
2. Do you have effective measures for customer due diligence, the ongoing monitoring of customers, and enhanced customer due diligence and enhanced ongoing monitoring? Are these sufficiently risk-focused, including the risk profiling of customers for these purposes?
3. Do you have policies and procedures in place which makes specific provision for using all relevant sources of information where you have concerns that a customer’s behaviour indicates problem gambling? Are you putting into effect such policies and procedures?
4. Are your customer interaction policies and procedures effective?
5. Are you alert to the risks various customers might bring?
6. Are you conducting appropriate customer interactions? Can you adequately evidence these customer interactions?

As Richard Watson has made clear in his above statement, the Gambling Commission will continue to take firm action against operators who fail to protect consumers or implement effective safeguards against money laundering.

Once again, failures to conduct (a) sufficient EDD on a high risk customer (including in relation to source of funds) and (b) effective customer interaction have been identified. As we said in yesterday’s posting regarding Gamesys, we are experienced in advising clients in relation to the above matters and we invite anyone with (a) concerns about regulatory failings on the part of their business or (b) a desire to make improvements to their regulatory systems and controls to contact us as soon as possible.