Stride Gaming subsidiary hit with £7.1m UKGC penalty

Stride Gaming subsidiary hit with £7.1m UKGC penalty

Tuesday, November 13, 2018 Posted by News Team
Money
Size of fine reflects the seriousness of AML and social responsibility failings, regulator says

 

Stride Gaming’s Daub Alderney subsidiary has agreed to pay a £7.1m fine to the UK Gambling Commission (UKGC) as a result of serious failings in its anti-money laundering and social responsibility controls.

The fine has been issued after the UKGC launched a review of Daub Alderney’s operating licence in January this year. The review was undertaken after the regulator decided it had reason to suspect that it was failing to operate in accordance with its licence conditions, and that the company may be unfit to carry out licensed activities.

This initial review led to the case being referred to the UKGC’s regulatory panel, which ultimately decided that Daub Alderney had breached conditions of its licence relating to anti-money laundering measures. It also failed to comply with social responsibility codes of practice.

Between June and July 2017, the UKGC completed a corporate evaluation of Daub’s anti-money laundering practices, and found that the business was not conducting the appropriate risk assessments of its customers.

Such assessments are required under a licence condition added in October 2016, to ensure operators can identify the risks associated with customers they transact with. Daub was informed of this following the investigation, then again by letter in October 2017, and finally produced a risk assessment procedure in February 2018.

However, the operator was also found to be in breach of the UK’s 2007 Money Laundering Regulations, by not monitoring an existing business relationship, as well as failing to maintain appropriate processes to tackle money laundering and terrorism financing.

Daub’s social responsibility controls were also found to be severely lacking. The UKGC said that the company did not have appropriate plans of action for dealing with at-risk or problem gamblers, instead only setting out vague guidelines of warning signs. It also failed to use anti-money laundering controls to identify when customers were using unusual payment methods or duplicate accounts, meaning it was failing to provide an appropriate safety net to protect its players.

Furthermore, Daub did not do enough to stop self-excluded players from opening casino accounts owned by the business, but on a different platform. As a result between 14th July and September 1st 2017, 73 self-excluded customers were able to gamble with new accounts, depositing £17,830.33.

At the time of the corporate evaluation Daub did not even have a written procedure for handling customer complaints and disputes – though, the regulator noted, it did have a defined procedure and had appointed eCOGRA as its dispute resolution provider.

As a result Daub has been issued with a warning alongside its £7.1m fine, and has had a number of additional licence conditions imposed on its operating licence.

The company must now appoint a qualified Money Laundering Reporting Officer, who must take annual refresher training in anti-money laundering processes. All personal management licence holders, senior management and key control staff must also take outsourced training, as well as refresher courses.

Finally, Daub must also continue to review the effectiveness of its AML and social responsibility processes and policies, bringing in external auditors to assess its reviews.

“This action is part of an ongoing investigation into the online casino sector,” UKGC executive director Richard Watson commented. “The operator’s standards did not match the protections required, and this fine reflects the seriousness of these lapses.”

 

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