UK Online Casinos Penalized for Negligence

By Ben Hamill - December 04, 2018
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UK Online Casinos Penalized for Negligence

The UK Gambling Commission’s continuous crackdown on gambling operators without ‘effective’ player protection standards has led to fines of nearly £14 million ($17 million) in total for three British online casino brands.

In addition to these hefty fines, a fourth company has also been instructed to cease operations across the pond altogether. Late last week, the UKGC noted that three firms – Casumo, Videoslots, and Daub Alderney – had failed to implement sufficient safeguards to prevent money laundering and keep their players safe from gambling related harm.

Daub Alderney was slapped with an immense fine of £7.1 million ($9.06 million) for its transgressions, while popular brand Casumo had to pay up £5.85 million ($7.4 million). Last but not least, Videoslots handed the Commission a cool £1 million ($1.28 million) for its own financial penalty.

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CZ Holdings Lose Their License

The fourth aforementioned company is a firm by the name of CZ Holdings, which was ordered to surrender its license to the UK watchdog following its industry review. The UKGC also sent Advice of Conduct letters to no less than nine other gaming companies, while another six are still under investigation by the regulator.

The Gambling Commission’s review, which began in February as a part of its investigation into how the local gambling industry aids money laundering and problem gaming, discovered that Videoslots only conducted very rudimentary checks on its players who deposited €2,000 ($2,278) or more within a 24 hour period. This was reportedly an inadequate approach, as it means that the same measures are used for all customers irrespective of their individual levels of risk.

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Inadequate Player Protection Found

The review also uncovered the fact that while Videoslots did make initial inquiries as to its players’ sources of funds, the brand failed to continue to make those checks. In one case, a player who failed the site’s automated identity check protocol supplied a fake driving license, which was not detected by the firm. The customer was thus able to register multiple, fraudulent bank accounts with the site, which were used to deposit and gamble thousands without any interventions.

After the website’s systems informed the company of the suspicious activity, the player in question had already made more than £17,405 ($22,223) in deposits, which are believed to have been the ‘proceeds of crime’.

Casumo was also found to have failed on this level, with three players at its platform showing potential signs of wagering addiction but no actions taken by the operator itself. In a statement on the matter, Casumo said that it had taken proactive actions to become fully compliant before the review had been conducted. Daub Alderney has also tightened its AML and player protection procedures, albeit after receiving a fine, and UKGC Commissioner Neil McArthur has noted that he hopes that online casino operators will now ‘sit up and pay attention’ in order to avoid similar fates.

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Tags
AML
Casumo
Daub Alderney
money laundering
UK Gambling Commission
UKGC
Videoslots
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