Two main types of failures
The UK Gambling Commission (UKGC) has fined EU Lotto £760,000 ($1.04m) for anti-money laundering and social responsibility failures. The operator of lottland.co.uk will need to submit to extensive independent auditing following the regulatory decision. It also received a formal warning for these failures, which took place from October 2019 to November 2020.
the operator has since taken corrective action to address the failings
The UKGC officially announced the action on Thursday; the official decision date was September 2. It did note that EU Lotto cooperated with the UKGC’s investigation and that the operator has since taken corrective action to address the failings.
As part of its social responsibility failures, the operator was found to not have considered the UKGC’s formal customer interaction guidance. The UKGC provided numerous specific examples.
Customers were able to regularly change their deposit limits without this being considered a marker of harm. There was no evidence of the operator having conducted relevant affordability or financial assessments to see if a customer was at risk of harm or being harmed. The majority of customer interactions were only in the form of emails highlighting EU Lotto’s available responsible gambling tools and did not need a response from the customer. Little evidence was seen of the operator altering interactions depending on the level of potential harm for a given customer.
The UKGC also listed some instances of EU Lotto’s anti-money laundering failures. The operator was not effectively analyzing or reviewing bank statements that customers provided as part of the proof of address process. It was not restricting user accounts of after sending out source of funds requests. EU Lotto was also allowing users to register debit cards on their accounts that had a different person’s name on them. Finally, EU Lotto was found to be overly reliant on ineffective threshold triggers and was lacking information as to how much a person should be allowed to spend based on their wealth, income, or other types of risk factors.
The response to the fine
Speaking on the regulatory action, UKGC executive director Helen Venn said: “This case, like other recent enforcement action, was the result of planned compliance activity. All operators should be very aware that we will not hesitate to take firm action against those who fail to meet the high standards we expect for consumers in Britain.”
the Gambling Commission fine was related to legacy issues around some of our compliance controls”
In a statement, Lottoland CEO Niger Birrell claimed that the company now employs the highest compliance standards across the board. He said: “The Gambling Commission fine was related to legacy issues around some of our compliance controls which have now been addressed.”
Some of the improvements the operator has made include significantly increasing its investment in compliance, more than doubling the number of people working in that department, reviewing key policies, and providing improved training.
EU Lotto is not the only major operator to receive a UKGC fine recently for anti-money laundering and social responsibility failings. A few weeks ago, Rank Group subsidiary Daub Alderney was hit with a £5.85m ($8m) fine.