June 14th, 2019 2.00pm
Online gambling operator Gamesys has learned the hard way that crime doesn’t pay, even if you are not the one committing it. According to the UK Gambling Commission, the operator will have to pay £1.2M “for failing to prevent harm and breaching money laundering regulations”
Gamesys Accused of Disregarding Red Flags
In the formal statement issued by UKGC in June 2019, the proverbial can of worms was opened after the investigation had been launched in 2014. In the following years, three casino customers were the focus of attention, and it was soon discovered that the individuals spent a substantial amount of stolen cash at Gamesys-operated online casino.
Sadly, the investigation revealed a number of flaws in the operator’s AML (Anti-Money Laundering) internal control procedure, which made it fairly easy for the system to be exploited.
For example, Gamesys failed to adequately inspect their members’ transactions and trace the source of funds, which they are legally obliged to do. The operator’s nonchalant attitude will cost the company dearly, as they will now have to reimburse the “ill-gotten gains” and repay £460.4K to the affected. On top of that, the operator will have to pay a £690K fine for the violation of the money laundering regulations.
In Gamesys’ defence, the regulator acknowledged that the operator was cooperative and willing to make amends.
Zero Tolerance for Those Who Fail to Comply with the Law
In the last couple of years, the regulator seems quite determined to do away with irresponsible gambling practices – the fines were increased and Gamesys is only one of many gambling providers who will have to pay their comeuppances.
In 2018, Paddy Power Betfair was among the first to realize UKGC is not kidding around. The operator received a £2.2M fine after providing gambling services to gambling addicts. One of the individuals who took advantage of Paddy Power’s flawed security system is none other than Simon Price, the former Chief Executive of Birmingham Dogs Home, who embezzled £900K and spent most of the money gambling.
Price was sentenced to 5 years in prison, which was a small price to pay for shattering people’s trust in charity organizations and endangering the whole project that relies on donations. Price was unable to repay the money that he so callously squandered, however, Paddy Power agreed to reimburse the charity.
Platinum Gaming Fined £1.6M
The regulator has issued another statement this month, according to which bingo giants Platinum Gaming, part of the group that operates legendary online casino 32 Red, will have to pay a regulatory settlement of £1.61M. One part of the amount is the reimbursement of stolen funds that the individual (who has been previously convicted of £2M fraud) lost at the operator’s casino. The rest (£990.2K) is the penalty for the company’s poor judgement, which resulted in more than £500K stolen-money transactions, that simply breezed through the operator’s system. The investigation revealed that Platinum Gaming continued to provide service for the player, despite extremely high deposits and losses – a pattern that should have triggered both the AML and social responsibility security procedures.
The Gambling Commission Executive Director, Richard Watson, has issued the following statement:
“There were weaknesses in Platinum Gaming’s systems and as a consequence, more than half a million pounds of stolen money flowed through the business. This is not acceptable, and I would urge all operators to carefully read this case and learn lessons, so they don’t make the same mistakes.
This is yet another example of us taking firm actions against online operators who fail to protect consumers or implement effective safeguards against money laundering. We must see the industry stepping up and providing consumers in Great Britain with the safest and fairest gambling market in the world. Where we continue to see failings, we will continue to take action.”
The money from the settlement will be directed towards the National Strategy to Reduce Gambling Harms.
Online Gambling Operators Under Scrutiny