Rank Group has agreed to a £5m regulatory settlement with the UK’s Gambling Commission after an investigation revealed anti-money laundering (AML) and social responsibility failings.
The LSE-listed business, which owns the Grosvenor Casino, Mecca Bingo and Enracha brands, revealed in its full-year results in August that it had already set aside this exact amount of money in anticipation of a settlement, and therefore it will have no impact on group profits and has not caused a drop in Rank Group shares.
It continues a recent clampdown on AML failings by the Commission. Bet St George and BresBet recently had their licences suspended and later ceased trading due to the same missteps, Ken Howells has also had its licence suspended, while QuinnBet was ordered to pay £609,104.
All of these cases have followed the Commission placing the UK’s gambling software sector at a ‘medium risk’ of money laundering and terrorist financing in early August.
Sue Young, Executive Director of Operations at the Gambling Commission, said: “Larger enforcement cases are often associated with online gambling but, as today’s announcement shows, the risks of anti-money laundering and social responsibility failures are equally alive in the land-based sector.
“We would advise all premises-based operators to take a careful look at this case and ensure their own business is not making the same mistakes, and therefore they do not face costly and inevitable Commission action.”
Commission reveals Rank Group’s errors
The Commission’s investigation into Rank Group focused on the company’s 51 Grosvenor Casino venues in the UK. The Commission found that Grosvenor had failed to update its policies to incorporate changes from the 2020 Money Laundering Regulations, leading to incorrect customer risk ratings.
It also discovered that venue management was granted decision-making freedom without sufficient central compliance oversight, allowing customers with higher money laundering risks to play without adequate Source of Funds (SoF) or Source of Wealth (SoW) checks.
Policies around cryptocurrency at Rank Group’s Grosvenor venues had a “lack of clarity”, with staff only having to verify that crypto had been converted into fiat currency (GBP) without scrutinising the origins or legitimacy of the assets.
Rank Group employees classified a Chinese student and crypto users as ‘standard risk’, despite internal policies mandating higher risk categorisation and immediate enhanced due diligence.
Examples of social responsibility failings were noted in the Commission’s investigation too, with one being a returning customer losing £200,000 across two visits without adequate photographic ID or proof of income on file.
Another case revealed that a user won around £260,000 and subsequently lost £250,000 of that over 12 days without any safer gambling interactions being logged.
These will not help the case of Rank Group and its Chief Executive Officer, Richard Harris, in its lobbying to government against a doubling in Machine Games Duty (MGD), which is heavily rumoured to be implemented.
Harris recently warned that the hike may wipe out a third of Rank Group’s portfolio, but anti-gambling lobbyists will be observing that as a positive given the company’s shortcomings at its Grosvenor venues.
Rank Group did state to the London Stock Exchange that it has tightened its operations at these locations, commenting that “remedial actions have been substantially completed”.
But the Commission took the opportunity to issue a stark warning to the rest of the UK’s gambling contingent in its enforcement notice.
“Gambling operators should take account of the failings identified in this investigation to ensure industry learning,” its statement read.
