UK: £2 million fine issued for poor anti-money laundering, problem checks of single customer
22 Jun 2018

A gambling firm which failed to conduct important anti-money laundering checks on a customer whose deposits eventually reached £750,000 has been fined £2 million by the Gambling Commission.

The watchdog said 32Red should have reviewed the customer’s account for source of wealth and other checks in 2016, but ‘because of the existing relationship the customer was deemed low risk and deprioritised.’

At the time his life time deposits (from November 2014) were in excess of £235,000.

It was only when an unusual play happened – which was suggestive of possible problem gambling (a seven-figure win, instantly replayed) – that the firm decided to perform a review in January 2017.

At this time, the lifetime deposits were £500,000.

“Following the review, a disclosure was made to the nominated officer and source of wealth requests were made of Customer A, but information was not received for a further 5 weeks despite continued play,” the Commission explained.

“The documentation supplied did not support the level of deposits but 32Red took no further action until the account was suspended in April 2017, by which life time deposits (from November 2014) were £758,000.”

There were also issues with the documentation supplied, specifically a payslip and a report.

The customer’s monthly net salary was about £2,150, yet average monthly deposits were in excess of £45,000.

“The material supplied – a payslip and report of commission for work – was not credible and showed volatility in receipted income.

“To take it at face value though would suggest a monthly net income of £13,000, yet average monthly deposits were in excess of £45,000,” said the regulator, “sSimple open source checks, which could have been indicators of the customer’s source of wealth, were not performed … in fact, the customer’s average monthly net salary was £2,150.”

 

 

In summary, the gambling firm demonstrated ‘operational weaknesses’ and breaches of money laundering rules relating to ongoing monitoring and enhanced due diligence.

It also demonstrated breaches to the Suspicious Activity Report (SAR) regime as ‘policies and procedures for disclosures to the nominated officer and for SAR reporting were inadequate,’ the regulator said.

Failed on problem gambling

Gibraltar-based 32Red was also fined because it did not protect the customer from gambling-related harm.

The Commission’s investigation revealed that there were at least 22 incidents which indicated the customer was a problem gambler – but instead of checking if they needed help, 32Red gave them free bonuses.

Indications of harm included admissions to 32Red staff that they had spent too much, displaying frustration and chasing losses, the regulator explained.

The Commission’s investigation also showed that 32Red failed to check that the customer could afford their spending on the site.

Asked to respond to the fine and ruling on the failings, 32Red’s parent company Kindred, which is based in Malta, said it is working on ‘improving business process’ across its brands.

“One such initiative was the integration of the behavioral monitoring system PS-EDS on acquired platforms, but in a changing and complex landscape work remains to be done,” a Kindred spokesman said.

Read more:

Banking: CBA fined $700m, had compliance failings for 770,000 accounts

After alleged HSBC $500 million SAR, financial crime probe widens

EU agrees on jail terms, sanctions for money laundering

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