The Gambling Commission has today announced the terms of a regulatory settlement under which online casino operator Mr Green will:
- make a £3,000,000 payment in lieu of a financial penalty (which will be directed towards delivering the National Strategy to Reduce Gambling Harms),
- agree to conduct a review of an additional 130 customers in the same manner as was previously undertaken in relation to 120 customers who were initially voluntarily reviewed (leading to closure of 113 customer accounts),
- agree to the publication of a statement of facts in relation to this case and
- pay £10,349.77 towards the Commission investigative costs.
It is made clear in the public statement (that you can download below) that the period of non-compliance investigated by the Gambling Commission pre-dated completion of the acquisition of Mr Green by William Hill plc in early 2019.
This latest public statement illustrates how long it took this Gambling Commission investigation to get to the stage of a regulatory settlement, taking into account that:
- the matters under investigation in this case commenced with a compliance assessment conducted by the Commission as long ago as July 2018,
- Mr Green acknowledged that it remained non-compliant until four months later (i.e. November 2018) but
- it then took until October 2019 (i.e. eleven months after that) for the Commission to commence the review of Mr Green’s operating licence.
In our experience, such matters do not need to take so long. We are experienced both in assisting clients in relation to such investigations and advising in advance of compliance assessments on any improvements required in order to achieve the Gambling Commission’s expectations in terms of all regulatory standards.
The Commission’s announcement of this latest public statement reads as follows:
A gambling operator is to pay £3m as part of the Gambling Commission’s targeted investigation into online casinos.
Mr Green is the ninth gambling business to face action as part of a regulator probe that has led to more than £20m in penalty packages since 2018.
Since the enforcement activity began six operators have surrendered their licence and can no longer transact with consumers in Britain. During the course of investigations into the nine most serious operating licence cases the Commission examined the actions of 22 individual Personal Management Licence holders. Of these, six surrendered their licence, six received a formal warning, one received an advice to conduct, seven are still ongoing and no further action was taken against two.
As part of today’s penalty package Mr Green will pay £3m to the National Strategy to Reduce Gambling Harms because it failed to have effective procedures aimed at preventing harm and money laundering.
As a result of these failures Mr Green:
- did not carry out social responsibility interaction with a customer who won £50,000, gambled it away and deposited thousands more pounds
- took ten-year-old evidence of a £176,000 claims payout as satisfactory evidence of source of funds (SOF) for a customer who deposited over £1m
- accepted a photograph of a laptop screen showing currency in dollars on an alleged crypto trading account as adequate SOF.
Richard Watson, Gambling Commission Executive Director, said:
“Our investigation uncovered systemic failings in respect of both Mr Green’s social responsibility and AML controls which affected a significant number of customers across its online casinos. Consumers in Britain have the right to know that there are checks and balances in place which will help keep them safe and ensure gambling is crime-free – and we will continue to crack down on operators who fail in this area”.
The online casino enforcement work is in addition to the Commission’s ongoing strategy to make gambling online safer. This has included strengthened online age and identity verification, enhanced rules and guidance on identifying and interacting with customers who may be at risk of harm and the banning of credit cards. The regulator is also pushing the industry to raise standards in the areas of VIP practices, advertising technology and game design, and is currently looking at online stake limits.
The announcement goes on to advise all UK licensed operators to read the public statement with a view to avoiding the same mistakes as those that were made by Mr Green. The public statement recommends that they particularly consider the following questions:
- Do you have policies and procedures in place to identify customers who may be experiencing or at risk of developing problems with their gambling?
- Do you have systems in place to identify potential problem gamblers?
- Do these include 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 trained to spot problem gamblers and know how to report concerns?
- Are there clear procedures once a concern has been raised?
- Do you know your customer (KYC)?
- Are you gaining a holistic picture of the customer’s source of funds, particularly in relation to VIP customers?
- Are you critically assessing assurances you receive as to source of funds?
- 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?
- Have you taken into account the Commission’s Money Laundering and terrorist financing risk assessment?
The Commission also recommends that, for further guidance on good practice in the above respects, operators should read its most recent Enforcement Report.