Stride Gaming, a United Kingdom online bingo platform, is facing a £7.1m fine for compliance failures, following an earlier warning after a review in the fall.
The UK gambling regulators take compliance matters very seriously. The UK Gambling Commission (UKGC) conducted a regulatory review in September into how Stride manages its business practices.
Stride’s £7.1m penalty – for systemic failures in its social responsibility and anti-money laundering responsibilities – is clearly substantial.
The UKGC’s fine was not too much of a surprise for Stride Gaming, which had been warned after the review that it would be facing a significant fine in the near future. However, the company did not expect it to be as much as £7m, as it had put aside only about half of this sum.
Contents of the review
The UKGC has a substantial list of concerns with regards to Stride Gaming.
The review showed that Stride had failed to conduct proper and consistent monitoring of its relationships with customers. It was found to be completely inadequate at spotting and dealing with risky situations, such as dodgy customer behavior.
Staff did not have the proper training and they were understaffed in key areas. Stride had not even enacted proper due diligence practices for customers, particularly in high-risk circumstances, and failed to keep proper records.
Stride also failed to make inquiries into the source of funds of 742 of its customers. It did eventually put a hold on 63 of these accounts, as it did not receive enough adequate verification information.
Further, Stride had not made or enacted any procedures or policies for risk management, nor had it trained its staff to identify and deal with any customer transactions that could be nefarious.
There was even a technical failure in September 2017, which stopped 98 self-exclusion emails and 30 emails for problem gamblers from being sent to the customer support team. This led to these problem customers depositing a further £17,380 and continuing to gamble. These individuals have since been refunded.
Stride has held its hands up and is accepting all responsibility. Since the regulatory review in September, the bingo operator is actively taking steps to shore up its business.
A risk and regulatory compliance committee is being set up at the company. This is in addition to a new director for compliance, a manager for fraud and risk training, and another quality assurance manager. Stride is also appointing additional staff in the area of compliance.
The UKGC’s stance
The executive director of the UKGC, Richard Watson, is focusing on looking into the online casino sector as a whole.
Stride was not an isolated case. Similar problems are occurring right across the industry. The seriousness of the fine is a reflection of how poor the protection standards were at Stride Gaming. It will send a loud and clear message to others in the space whose practices fall below par.
Neil McArthur, CEO of UKGC, is encouraging online operators to strive for the maximum requirements rather than just complying with the bare minimum.
In the future, the size of fines imposed by the UKGC will continually escalate until the sector shapes up its compliance practices. Stride’s £7.1m fine is the second largest in the history of the UKGC.
888 Holdings historic fine
The largest fine the UKGC ever inflicted was £7.8m in August 2017 on 888 Holdings, the popular online gambling brand. The record fine was for not properly preventing problem gamblers from playing on its various platforms.
888 Holdings has an online casino, sports betting, poker and bingo platforms that are popular across the world.
The UKGC discovered that 888 failed to prevent more than 7,000 people who partook in self exclusion policies to continue to gamble through its various online platforms.
This technical failure meant that someone who self-excluded themselves from using the online poker platform, for example, could still use their online casino or sports accounts to gamble.
With problem gambling being such a serious issue and on the rise, a significant fine was needed to express the zero tolerance policy the UKGC implements for this behaviour.
The UKGC is a significant force to be reckoned with and all casino operators targeting UK customers will be kept on their toes.