The UK Gambling Commission shows no mercy with Christmas on the horizon as it imposes fines on three firms totaling almost £14m today and stops others from operating.
In total, Daub Alderney is to pay £7.1m, Casumo £5.85m and Videoslots £1m. A fourth company, CZ Holdings, will no longer be able to target UK gamblers having surrendered its license after the review was launched.
Nine other operators have been given the “advice to conduct” letters and a further six are still under investigation.
It all comes down to whether effective safeguards were in place: these prevent money laundering and harm to customers from gambling. This year alone, the UKGC handed Paddy Power a £2.2m fine for failing to stop stolen money being gambled and not protecting problem gamblers.
Rank Group was also issued a £500,000 fine for protection failures and 32Red stumped up £2m for the same failures.
Today’s fines are part of an ongoing probe into the way the industry combats problem gambling and money laundering.
UKGC chief executive Neil McArthur said: “I hope today’s announcement will make all online casino operators sit up and pay attention, as our investigations found that a large number of operators and their senior management were not meeting their obligations.”
Jeremy Wright, secretary of state for Digital, Culture, Media and Sport, said: “Any online operator that thinks it can ignore its duty to protect players should take note today – there will be consequences. Protecting vulnerable consumers is our prime concern, and it must be the priority for gambling operators too.”
Daub Alderney (part of the Stride Gaming Group), was accused of breaching the conditions of its license relating to anti-money laundering measures and for failing to comply with social responsibility codes of practice. It won’t be appealing the fine.
Nigel Payne, the non-executive chairman of Stride Gaming, commented on the findings: “Stride Gaming considers that robust anti-money laundering and social responsibility controls are extremely important.
“We remain disappointed with the particular circumstances of this case and with certain factual inaccuracies that were presented by the Gambling Commission to the regulatory panel in the course of the proceedings, which we believe colored the size of the fine that has been imposed.”
Originally, Stride Gaming had set aside £4m for the fine, and it is believed that the almost double amount of £7.1m will send shockwaves through the iGaming community.
In a statement, Richard Watson, the commission’s executive director, said: “This action is part of an ongoing investigation into the online casino sector. The operator’s standards did not match the protections required, and this fine reflects the seriousness of these lapses.”
For Malta-based Casumo, the UKGC confirms that it has further sanctioned a £5.85m financial penalty.
In a review of Casumo’s business, which began in January, the UKGC found that it had failed to check customers properly and monitor their activities.
Included in the review were three customer accounts that showed potential signs of problem gambling, but no further action was taken.
The company says it is now committed to improving.
After a review that started in February, the commission found that Maltese company Videoslots had started to make initial inquiries into customer funds and their sources but had not continued to.
In one case a Videoslots customer failed automated identity checks and instead provided a fraudulent driving license that was not detected. The customer went on to register multiple fraudulent credit cards, which remained undetected but were used to deposit and gamble significant amounts.
The customer had deposited almost £17,405 by the time the company’s systems flagged the account. The UKGC said those deposits were “suspected to be the proceeds of crime”.
Videoslots accepted that it had weaknesses in its systems and said it had taken action to address the issues.
Further investigations afoot
It seems that the fines won’t stop here either. Three Personal Licence Holders (PMLs) have now surrendered their licenses, four have been issued with a warning and two have been issued with Advice as to Conduct notices. A further three individuals who hold PMLs are still under investigation.