HomeInsightsThe Gambling Commission ramps up its enforcement initiative

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The Gambling Commission has today issued a statement in which it sets out the results of the thematic review it announced at the very beginning of 2018. The letter the Commission wrote to all holders of remote casino licences in January created significant waves as the industry set about trying to work out which operators were in the firing line for perceived compliance failures.

Today’s announcements confirmed widely circulating rumours that a number of operators were to receive hefty fines for what the Commission called “failings to put in place effective safeguards to prevent money laundering and keep consumers safe from gambling-related harm”. These enforcement cases derived from that thematic review.

Alongside the specifics of each case, the Commission also published some related guidance, highlighting “common failings by remote gambling operators”. These include:

  1. Failure to conduct an appropriate assessment of ongoing and emerging risks of money laundering and terrorist financing and implement policies, procedures and controls which manage the identified risks effectively.
  2. Failure to introduce measures for customer due diligence, ongoing monitoring of customers, and enhanced customer due diligence which are sufficiently business or external risk-focused (including considering lessons from previous casework). Failure to implement internal controls and monitoring systems relevant to the size and complexity of the business, including the number of customers and their profile (such as jurisdictional risk) and the variety and type of products and services provided.
  3. Failure to keep adequate records of responsible customer interactions and engagement.
  4. Failure to provide staff with appropriate training to ensure that they are aware of, and know how to deal with, transactions, activities or situations which may be related to money laundering or terrorist financing.
  5. Failure to put into effect policies and procedures which make specific provision for the use of all relevant sources of information where there are concerns that a customer’s behaviour may indicate problem gambling.

Of particular note, today has been the connected announcement that sanctions have been meted out against the most senior executives in the affected operators, with holders of personal management licences receiving official, public warnings. The steps taken follow the clear warning given by the previous Chief Executive of the Gambling Commission who, in a speech to the industry in November 2017, said:

“I want to restate our commitment to make the UK the best place in the world to enjoy gambling. To make sure that consumers are safe and that operators are fair and responsible….. we are at a tipping point, and those that do not share this commitment, those who do not deliver for the consumer will find themselves in an uncomfortable position, with their future in this industry increasingly in peril.”

The Commission’s stated strategy of holding the most senior executives to account and not solely focusing on shortcomings within operators’ compliance teams has now resulted in decisive action. If the message in November 2017 didn’t get through to industry leaders, today’s message surely will.

The Commission’s statements can be accessed here. The lessons-to-be-learnt can be accessed here.