The Gambling Commission has had a busy 2018, what with handing out fines to gambling operators for not playing by the rules and a few of those included;
- 32Red was left red-faced with a £2m fine for failing to protect a problem gambler.
- Rank Group coughed up £500,000 for protection failures.
- £2.2m fine for Paddy Power, for failing to stop stolen money being gambled online and in their high street bookmakers plus, a slab of that fine was for failing to protect a problem gambler.
But it would seem that iGaming operators are not playing ball with the rules set out before them, which is why Daub Alderney (part of Stride Gaming) have been issued with a £7.1m fine, which came as a shock…
…Despite this, Daub Alderney will not be contesting the fine, so what is it?...
…Failing to follow the Gambling Commission rules, aimed at preventing money laundering and protecting vulnerable customers has come at a price – a very big price!
More Than Expected:
Originally, Daub Alderney had set aside £4m for the impending fine, but weren’t the only ones shocked by a fine almost double that…
… “This is an astonishing penalty imposed by the Gambling Commission’s Regulatory Panel on Daub Alderney Limited. The fine is almost double that of the original £4m set aside by the board of Stride Gaming to cover this outcome, and comes alongside a warning and additional conditions imposed on the operating licence. This penalty will send shockwaves throughout the gaming industry, as the amounts involved are now so high that they are materially significant for some operators,” according to Richard Williams, the licensing partner at law firm, Joelson.
Online Casino Sector Investigations:
Richard Watson, Gambling Commission Executive Director, said…
… “This action is part of an ongoing investigation into the online casino sector. The operator’s standards did not match the protections required, and this fine reflects the seriousness of these lapses.”
Nigel Payne, the non-executive chairman of Stride Gaming also commented on the fine…
… “Stride Gaming considers that robust anti-money laundering and social responsibility controls are extremely important. We remain disappointed with the particular circumstances of this case and with certain factual inaccuracies which were presented by the Gambling Commission to the regulatory panel in the course of the proceedings, which we believe coloured the size of the fine that has been imposed.”
The Decision:
The outcome of the fine issued, is as follows:
Approaching the decision as to what sanction(s), if any, should be imposed under section 117 of the Act the Panel referred to the Indicative sanctions guide (June 2017) and the Statement of principles for licensing and regulation (June 2017).
The Panel agreed that given the seriousness of the licence breaches it was appropriate to:
- issue the Licensee with a warning under section 117(1)(a) of the Act;
- impose the following additional licence conditions to the Licensee’s operating licence under section 117(1) (b) of the Act requiring the Licensee to:
- appoint an appropriately qualified Money Laundering Reporting Officer who holds a Personal Management Licence (PML); in appointing the MLRO to ensure the individual must undertake annual refresher training in anti-money laundering and be able to evidence this to the Commission.
- ensure that all personal management licence holders, senior management, and key control staff undertake outsourced anti money laundering training. All such staff must undertake outsourced refresher training annually thereafter the Licensee continues to segregate funds as per Licence condition 4.1 at a level of ‘medium’ as defined by our guidance.
- continue its review of the effectiveness and implementation of its anti-money laundering (AML) and social responsibility (SR) policies and procedures, and in addition engage external auditors, whose appointment and terms of reference must be agreed with the Commission, to sample the reviews that have been carried out to provide additional assurance as to the findings. The Commission requires the outcome of the review and subsequent action plan to implement any recommendations to be reported to the Commission by the person who assumes responsibility for this action, and that the Commission will have access to all the documents relating to the work.
The Panel also agreed that it was appropriate to impose a financial penalty under section 121 of the Act. In reaching this decision the Panel had regard to the Statement of principles for determining financial penalties (June 2017). The Panel concluded that it was appropriate for the Licensee to pay a financial penalty of £7,100,000 and that this was a proportionateoutcome.
Source: “Daub Alderney to pay £7.1m fine for anti-money laundering and social responsibility failures” https://www.gamblingcommission.gov.uk/news-action-and-statistics/news/2018/Daub-Alderney-to-pay-7.1m-fine-for-anti-money-laundering-and-social-responsibility-failures.aspx. UK Gambling Commission. November 13, 2018.
