UKGC hits 32Red with £2m fine for social responsibility and AML failures

UKGC hits 32Red with £2m fine for social responsibility and AML failures

Thursday, June 21, 2018 Posted by Craig Davies
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At least 22 incidents indicated the customer had problems

Online gambling firm 32Red has been hit with a £2m penalty package by the UK Gambling Commission (UKGC), after failing to protect a consumer who deposited £758,000 during a two and a half year investigation.

Penalised for not having sufficient procedures in place pertaining to gambling-related harm and money laundering failures, the investigation focuses on dealings between November 2014 (when the commission licensed 32Red) and April 2017.

During which time deposits were made without the appropriate social responsibility or money laundering checks carried out, with it revealed that at least 22 incidents indicated the individual was a problem gambler.

However instead of checking if help was required free bonuses were instead awarded for the individual, who established a “business relationship” with 32Red in September 2011, and was subsequently granted VIP status from February 2013.

Due to only being licensed by the UKGC in November 2014, the case only relates to that time frame.

Richard Watson, Commission Executive Director, said: “Instead of checking on the welfare of a customer displaying problem gambling behaviour, 32Red encouraged the customer to gamble more - this is the exact opposite of what they are supposed to be doing.

“Operators must take action when they spot signs of problem gambling and should be carefully reviewing all the customers they are having a high level of contact with.

“Protecting consumers from gambling-related harm is a priority for us and where we see operators failing in their responsibility to keep their customers safe we will take tough action.”

It was also highlighted that further failing related to checking that the customer could afford their spending, with Indications of harm including admissions to 32Red staff that they had spent too much, displaying frustration and chasing losses.

Further details relating to its £2m penalty package breaks down as follows:

  • £709,046 divestment of the financial gain.
  • £1.3million payment in lieu of a financial penalty.
  • £15,000 payment towards investigative costs.
  • Improvements to policy, procedure and risk management.

Full admission to breaches were made, with the operator vowing to implement a variety of key changes and improvements, to both processes and procedures, taking place immediately as the incident came to light, and later during its June 2017 Kindred Group acquisition, these include:

  • An independent third party audit of AML policies, procedures and controls with recommendations accepted and implemented.
  • A full review of all active customers against revised policies.
  • Introduction of group Anti-Money Laundering/Counter Terrorist Financing (AML/CTF) policy, supplemented by a regional policy for Great Britain adoption of Kindred’s ‘player safety-early detection system’, which will assist with the earlier detection of players that are potentially at risk of harm, enabling better detection and faster, better quality interactions.
  • learnings from public statements and other guidance, as well as sister company engagements with the Commission, built into company risk management policy, followed by implementation and training for relevant staff.
  • Integration to a single platform across companies within the Group, so they work to unified and aligned policy.

Totally Gaming says: A number of operators have fallen foul of the UKGC this year, with the commission coming down hard on the likes of William Hill, Sky Bet,Tabcorp and LeoVegas, for a variety of serious breaches and failures resulting in huge fines and penalty packages being handed down as a result. Customer welfare is of the utmost importance regarding such operations, and the UKGC has shown its hand should further such examples come to light.

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