The new year is less than a week old, but UK online gambling operators are already under renewed regulatory assault.
On Friday, the UK Gambling Commission (UKGC) posted a notice indicating that it had “begun investigations into 17 online operators, and are considering whether five of these require a license review.”
The UKGC declined to identify either the 17 operators under investigation or the five who may face a license review. The regulator did say that the investigations followed the “serious nature of our findings” from the UKGC’s thematic review of the online sector’s “approach to anti-money laundering and social responsibility.”
The UKGC also published a letter it says it sent to all UK online casino licensees instructing them to review their own processes for “customer interaction and anti-money laundering.”
The letter makes it plain that the failings identified by the UKGC’s review “have raised significant concerns about the effectiveness of the Casino sector’s management and mitigation of risks to the licensing objectives.”
Specifically, the UKGC claimed to have found “a lack of evidence of ongoing monitoring of customer accounts” and that this lack of proactive attention usually means that “both money laundering and/or [social responsibility] issues go unreported.”
Some of the operators’ Money Laundering Reporting Officers (MLRO) who claimed to have industry experience were found to have “no formal AML qualifications” and were “unable to provide suitable explanations as to what constitutes money laundering.”
Many of these MLROs also fell short of their responsibilities regarding Suspicious Activity Reports (SARs), including providing insufficient information within SARs, and essentially treating the filing of an SAR as the end of the operator’s responsibility, “as opposed to operators undertaking further enhanced due diligence and being more curious” about their customers.
Some licensees were found equally wanting in monitoring customer activity to detect problem gambling behavior. The UKGC says it identified “many” instances in which customer activity should have prompted customer interactions, yet there was no evidence that operators took any action.
UKGC CEO Sarah Harrison noted that online gambling accounted for one-third of UK market revenue, and that the regulator would maintain “a sharp focus” on the online sector. The UKGC has warned online operators that it was sharpening its enforcement knives and Harrison said Friday that the regulator would be “relentless in turning that vision into reality.”
Last year saw the UKGC dole out an unprecedented number of six- and seven-figure fines against its online licensees, including a record £7.8m penalty against 888 Holdings for failing to protect thousands of customers who’d self-excluded from 888. If this first week is any indication, UK online licensees face an even bumpier ride in 2018.