BUSINESS

Gala Coral penalized nearly £880k over anti-money laundering and KYC lapses

TAGs: anti-money laundering, Gala Coral, gala coral group, UK Gambling Commission

gala-coral-uk-gambling-commission-money-launderingUK-listed gambling operator Gala Coral Group has been forced to return nearly £850k after displaying “serious historical weaknesses” in its anti-money laundering (AML) and social responsibility controls.

On Wednesday, the UK Gambling Commission published a report on its investigation of the activities of a high-volume bettor who patronized Gala Coral businesses Coral Racing and Coral Interactive. Police say the punter in question funded his wagers with £800k stolen from the bank account of a “vulnerable adult.”

The punter/thief – currently serving three years in prison – was a Coral retail customer since 2012 and had wagered online with the company between January 2014 and January 2015. Gala Coral’s online and retail VIP teams reportedly were under the impression that the punter was an electrician who came from a wealthy family.

However, Gala Coral staffers arrived at this conclusion primarily by taking the customer at his word, as well as via interactions with the punter’s friends and family members at a couple of hospitality events to which Gala Coral invited the wagering whale.

The punter’s online wagering activity eventually convinced Gala Coral of the need to do a more thorough investigation into the source of his wealth. But this examination consisted mainly of open source searches to verify the punter’s address – although not determining whether he owned the house in which he lived – and his employment as an electrician.

The UKGC also took issue with the fact that the disparity between the customer’s income and his wagering led Gala Coral to flag him as ‘red’ in October 2014, yet Gala Coral decided there was no urgency in compiling suspicious activity reports.

Gala Coral acknowledged that it had fallen short of the UKGC’s AML and ‘know your customer’ expectations but claimed it had since improved its procedures. Regardless, the company proposed a voluntary settlement in which it agreed to divest itself of the £846,664 it had earned from the punter’s wagering. Gala Coral agreed to pay an additional £30k to the UKGC to cover its investigation costs.

Gala Coral joins a growing list of gambling operators whose knuckles have been rapped by the UKGC for similar shenanigans. In February, Paddy Power was hit with £310k in fines and penalties, while Caesars Entertainment’s UK division was relieved of £845k last December and Rank Group’s Mecca Bingo was penalized nearly £1m in September.

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