In its recently published Compliance and Enforcement report for 2020-2021, the Great Britain Gambling Commission stated anti-money laundering and social responsibility procedures fell short. The report stated, “The reasons for these failings are almost as concerning as the failings themselves. Our casework reveals that operators are either not making suitable resources available or are simply putting commercial objectives ahead of regulatory ones. This is simply unacceptable and will be seen as such by others in the industry who work hard to achieve compliance.”
Among the reasons cited for the setbacks were not having proper due diligence measures in place, not applying due diligence when needed and relying too much on third parties to carry out due diligence reviews. Also, the report said, many operators’ standards for due-diligence checks were too high and based on a single measurement. Furthermore, the report indicated many operators had “inadequate risk assessment methodology” in place for money laundering and terrorist financing.
The Commission gave several examples of inadequate checks. For instance, one operator was fined £6 million ($8 million USD) after allowing a player to lose £1.1 million ($1.5 million) with no responsible gambling interaction. In other instances, a customer deposited £20,000 ($26,500) in cash on two separate occasions using false identification; another customer attempted to present sealed cash packets at one casino while claiming it came from another operator; and an organized crime gang member used money at a casino obtained through cybercriminal activity.
The report also noted gambling operators seemed more concerned about their image in the media than mitigating money laundering and terrorist financing risks. The report emphasized licensees must comply fully with the terms of their license “as relevant to anti-money laundering and counter terrorist financing.”
The report further stated, “The Commission is continuing to see repeated examples of operators failing to undertake review of their risk assessments which take into account the Commission’s emerging risk publications. We continue to see insufficient due diligence checks which increases the risk of accepting illicit funds, including the proceeds of crime and terrorist financing.”
GB Gambling Commission Interim Chief Executive Andrew Rhodes recently noted the Commission had recovered £100 million (US$132 million) in penalty settlements since 2017 and had retracted 10 operator licenses. This year alone, he said, the Commission agreed to regulatory settlements with four brick-and-mortar casinos and fined a fifth due to breaches of social responsibility and anti-money laundering process.
Rhodes noted this was not cause for celebration.
“This year so far is already on course to be our busiest year ever in terms of enforcement activity, and that’s something that should concern us,” he said. “We are seeing the same companies committing the same offenses for the second and third time, and my concern is that those operators are starting to see fines as a compliance tax, and that’s something that I’m not prepared to tolerate. It must also be incredibly frustrating for those in the industry who are working hard to comply and to raise standards.”
Meanwhile, government pledges to overhaul gambling legislation have been delayed for a second time, until February 2022. The Conservative party campaigned on reviewing gambling laws in the 2019 general election. A white paper was initially expected before the end of last year, before being bumped into 2021. Now sources said the government will delay its proposals until the next 10-year National Lottery license is awarded. Camelot, which has operated the lottery since it began in 1994, is said to be facing tough competition.
Labour MP Carolyn Harris, chair of a bipartisan group examining problem gambling, said the review process had “gone on for long enough. The government made a commitment to reform our gambling laws in 2019. Two years later they are still deliberating while the online industry is weakly regulated, reaps vast profits and people continue to be harmed.”
In related news, the UK Betting and Gaming Council, the standards body for the regulated UK betting and gaming industry, recently launched a forum involving Flutter, Bet365, William Hill and other operators to review the ways technology can help protect children and vulnerable people online. Google, Twitter, Meta and Snap also are participating.
BCG Chief Executive Michael Dugher noted since it was founded in 2019, the BCG has introduced a social media code of conduct for football clubs and gambling websites, and its members are implementing a whistle-to-whistle ban on gambling ads during football matches. Dugher said, “Since being set up two years ago, we have worked tirelessly to drive up standards and promote safer gambling, and this is proof of our determination to go even further.”
