White Hat Gaming to pay £1.3million and improve its AML and safer gambling controls

The Gambling Commission has today (28 January 2021) announced the conclusion of a regulatory settlement with Malta-based White Hat Gaming Limited, whereby the online casino and betting operator:

  • will pay £1,334,053.18 in lieu of a financial penalty, that will be directed towards delivering the National Strategy to Reduce Gambling Harms,
  • agree to publication of a statement of the facts in relation to this case,
  • pay £9818.63 towards the Commission’s costs of investigating the case, and
  • commit to an ongoing programme of improvements to strengthen its policies and procedures including:
    • the automated prevention of more spending once limits are hit,
    • an increase in safer gambling customer interactions,
    • more robust source of funds checks and
    • regular reviews of anti-money laundering controls and processes.

The Commission’s website announcement (including a detailed public statement) – that you can download below – reads as follows:

A Gambling Commission assessment of an online gambling business has led to the operator overhauling its approach to social responsibility and the prevention of money laundering.

The assessment – part of the regulator’s ongoing compliance work – identified failings in the way online operator White Hat Gaming identified and managed customers who were at higher risk of money laundering and problem gambling.

Inadequate anti-money laundering and social responsibility procedures led to failures including not establishing the source of funds for a customer who lost £70,000 in three months and ineffective interaction with both a second customer who lost £50,000 in just six hours and a third customer who lost £85,000 in just over one hour.

In addition to paying a £1.3m regulatory settlement, White Hat Gaming has committed to an ongoing programme of improvements to strengthen its policies and procedures.

These improvements include the automated prevention of more spending once limits are hit, an increase in safer gambling customer interactions, more robust source of funds checks and regular reviews of anti-money laundering controls and processes.

The failures occurred on the operator’s www.grandivy.com, www.21casino.com, www.hellocasino.com and www.dreamvegas.com websites.

Richard Watson, Commission Executive Director, said:

“Through our tough compliance and enforcement activity we will continue our work to raise standards in the industry and continue to hold failing operators to account.”

The operator’s £1.3m payment in lieu of a financial penalty will be directed towards delivering the National Strategy to Reduce Gambling Harms.

UK-licensed operators should note that, in considering an appropriate resolution to its investigation into White Hat Gaming, the Gambling Commission had regard to the following ‘aggravating’ and ‘mitigating’ factors:

Aggravating factors

  • There were repeated breaches of licence conditions as a result of the historical weakness of internal controls and procedures.
  • The breaches gave rise to financial gain for the licensee and had an impact on consumers.
  • The Licensee should have been aware of the breaches.
  • Many of the breaches were serious and had an impact on the licensing objectives.

Mitigating factors

  • There was timely co-operation with the investigation undertaken by the Commission and no attempt to conceal the extent of the breaches.
  • There is no evidence the breaches were committed intentionally.
  • An ongoing programme of remedial action was commenced in response to the breaches being brought to the Licensee’s attention.
  • The Licensee has shown insight into the seriousness of the breaches.

In terms of background, the Commission had initially investigated White Hat Gaming’s handling of seven customers’ accounts, following concerns identified at a compliance assessment (then referred to as a corporate evaluation) in March 2019. That resulted in the Commission finding failings in the way White Hat Gaming identified and managed customers who were at higher risk of money laundering and problem gambling. In January 2020, that led to the Commission commencing an operating licence review, that revealed breach of two conditions of the operator’s operating licence.

We have considerable experience in advising both land-based and remote UK-licensed operators (both before and after UKGC compliance assessments and/or operating licence reviews) on improving their AML and safer gambling risk assessments, policies, procedures and controls and, where appropriate, their corporate governance frameworks and internal controls.

Do please contact us – David Clifton dc@cliftondavies.com or Suzanne Davies sd@cliftondavies.com – if you would like to discuss how we might be able to help you and your business in any of the above respects.