SBC News Voice of the Sports Betting Industry
The UK Gambling Commission (UKGC) has allowed the Malta-based online casino group, Videoslots Limited, to pay a £2m regulatory settlement for breaches in regulatory compliance.
This settlement follows the UKGC’s investigation into Videoslots, which focused on the company’s failure to match its LCCP duties from October 2019 to February 2022. The operator was found to have failed to implement AML procedures efficiently and to interact with customers to minimise gambling-related harm.
The payment is the second regulatory enforcement action against Videoslots, which previously agreed to pay £1m in August 2019 for KYC failings. The Commission’s latest investigation uncovered failures in social responsibility and anti-money laundering procedures.
Failures in social responsibility included inadequate identification and regulation of customers displaying risky behaviour and potential harm from gambling.
According to the investigation’s public statement, a customer deposited £112,225 and lost £58,725 between 21 November 2021 and 7 January 2022. During this period, the customer triggered alarms such as gambling for long periods, gambling in the early hours, and losses exceeding thresholds based on their declared source of wealth.
The investigation also found AML failures, including significant delays in implementing risk-based processes, an inability to meet customer due diligence requirements, and an insufficient number of AML analysts to manage the required volume of data or conduct AML account reviews per established procedures.
“Customer A triggered several AML alarms and was able to deposit £112,225,” the report stated. “However, AML analysts failed to properly implement all actions required by the licensee’s AML policies and procedures. Similar failings were found with other customers.”
The Commission expressed concern that Videoslots had repeatedly ignored warnings about ineffective AML actions, insufficient AML analysts, neglect of customer due diligence, and failures to identify and restrict customers at risk of gambling harm.
Videoslots has acknowledged its failings, stating that its operational capacity was “severely impacted by the Covid pandemic during the relevant period.”
The agreed-upon regulatory settlement of £2m includes a payment in lieu of a financial penalty of £1,505,158.02 that will support socially responsible causes, £494,841.98 in divestment, and a payment of £11,308.00 towards the Commission’s investigative costs.
Given the gravity of these breaches, there are concerns that other customers may have been affected by Videoslots’ conduct. Aggravating factors include the protracted nature of the breaches, some lasting for one year and nine months, and the repetition of mistakes similar to those in previous cases handled by the Commission.
In conclusion, the UKGC’s enforcement team emphasised the need for operators to learn from compliance failings and provide appropriate staff training to recognise AML and social responsibility failings.
“The case serves as a sobering reminder to all operators of the imperative to adhere strictly to regulatory norms, ensuring the safety and well-being of customers,” the UKGC stated.
