British Enforcement shifts to Offline

The UK regulator recently responded to a ‘Freedom of Information’ request with the disclosure that some fifteen (15) land-based casinos are undergoing regulatory action of one sort or another. Numerous enforcement actions have been undertaken against the online industry over the last couple of years and it now appears that the Commission is shifting its focus towards the land-based sector. The fifteen current ongoing land-based reviews mirror the seventeen online reviews that were ongoing at one point eighteen months or so ago. The issues, however, seem to be the same across both industry sectors. ‘Casino 36′ based in Wolverhampton has paid £300,000 for serious AML failings that seem to fall under the general (and predictable) heading of not taking much notice of where customers’ money comes from and not intervening or even asking the right questions when signs of danger appear. The charge-sheet will be familiar to those of us who have followed the various online enforcement actions. In the case of Casino 36, the regulator was clearly particularly unimpressed by the staff and the expertise within the business: the regulatory settlement involves the addition of conditions to the operator’s licence that demand frequent and intensive education and training, including from third party providers and for PML holders. The Casino indicated in its response that a number of issues (including ‘confusion’ about self-exclusion) had been identified and fixed prior to the Commission’s review but the Commission’s response was nevertheless entirely predictable and no doubt pulled straight off the enforcement home-drive in Birmingham:

“Operators have to understand their customer base. This can only be achieved if they know their customers and ask the right questions to meet both their anti-money laundering and social responsibility obligations.”

The lesson is very clearly that land-based – as well as online – operators need to take notice of the Commission’s latest ‘Enforcement Report’ as absolutely essential reading for PMLs and compliance staff. In case Wiggin readers missed it when I blogged on it yesterday, the download is here:

£300,000 may not seem a large sum to major online operators but to a land-based casino hard-pressed by online competition it is likely to represent a material hit. As the regulator hammers home the same message, action after action, its patience with operators who appear not to have learned the lesson will surely start to wear thin. Hopefully the slowcoaches who fail to raise their game will find themselves in an increasingly small minority. Good compliance – and the public and political hostility generated by the lack of it – will need to be the first stepping-stone in the industry’s rehabilitation of its image right across Europe. Combined with initiatives like the increased voluntary research and treatment levy announced by the major UK players recently, robust standards of customer protection can serve the useful purpose of heading off the more punitive and irrational media and political demands that are likely to arise if the industry fails to be seen to be putting its own house in order. We’re now all in this together and it will increasingly be the case that even the occasional bad apple is going to prevent those businesses that have self-improved from getting the PR dividend that they are entitled to.