Sarah Garnder: UKGC consultation conclusions due this summer

Vivaro charged £337k in UKGC’s first regulatory action of the new year

The UK Gambling Commission (UKGC) is not letting up in its campaign against non-compliant gaming operators, handing out a £337,631 regulatory settlement to Vivaro Ltd.

Prevention of money laundering and failures on safer gambling were once again the main reasons for the UKGC’s regulatory enforcement action against the VBet operator, with shortcomings identified across a number of areas.

The Commission stated that Vivaro accepted the findings of its investigation, in particular that there were ‘significant weaknesses’ in its systems relating to how the firm ‘managed its customers for AML and social responsibility purposes’.

Specific failures between October 2020 and June 2021 saw customers deposit ‘significant’ sums of money before KYC checks were carried out, whilst the company’s staff were not informed of Source of Funds (SoF) processes.

Additionally, Vivaro’s AML checks were deemed ‘ineffective’ in establishing source of funds when conducting customer reviews, bank statements were not scrutinised to identify other incomes and a ‘reliance was placed on winnings from other operators’. 

The UKGC explained: “It is the Commission’s view that whilst some checks were conducted, these were not sufficient until the customer had met the ‘very high AML threshold’ set by the Licensee. It is the Commission’s view that Vivaro were over reliant on the customer’s net gambling position.”

Citing examples, the UKGC pointed to one customer who deposited $14,850 within two months without SoF being established, and another who showed a bank balance of over £270,000 from a separate betting account. 

“Vivaro failed to sufficiently consider the risks associated with recycled winnings,” the UKGC continued. “In particular, no additional checks were undertaken to confirm the origin of the funds that had been used to gamble. Customers could be misappropriating funds and re-depositing fresh criminal spend.”

Lastly, the Commission also criticised Vivaro for failing to ‘sufficiently consider the risks’ associated with crypto currency gambling, with one customer betting using these funds. 

Crypto currency is considered ‘high risk’ by the Commission – the regulator stated that the area ‘should be subject to further investigation’, as it looks to examine, in the word’s of CEO Andrew Rhodes and Deputy CEO Sarah Gardner, ‘novel’ products such as blockchain-based assets.

However, the Commission’s investigation found no evidence of criminal spend, and in determining the appropriate outcome, the regulator noted in its assessment that Vivaro had been cooperative with the investigation and had taken ‘proactive and timely action’ to address the issues raised.

Vivaro will make a payment in lieu of a financial penalty of £302,500, a divestment of £35,131 and a contribution of £15,606.50 towards the UKGC’s investigative costs.

Additionally, the operator accepted the ‘voluntary placing of additional conditions’ on its licence, including a third party audit to be undertaken within 12 months of the firm’s licence review.

Last year saw the UKGC embark on an extensive campaign of regulatory enforcement actions, handing out hefty penalties to the likes of Entain (£17m), (£630k), LeoVegas (£1.32m), 888 (£9.4m), Sky Bet (£1.17m) and SpreadEx (£1.36m).

Check Also

Sarah Garnder: UKGC consultation conclusions due this summer

Quarterly returns set UKGC on right track to ‘evidence-led’ direction

The UK Gambling Commission’s (UKGC) recent switch to quarterly regulatory reporting for the gambling sector …

uk gambling commission (UKGC)

UKGC reveals punters dismayed by affordability checks under FOI request

A public survey on affordability checks has been forced out of the hands of the …

SBC News BGC and Rank welcome DCMS' positive response to modernise UK casinos

BGC and Rank welcome DCMS’ positive response to modernise UK casinos

Voices from the industry continue to pour down in support of yesterday’s DCMS response to …