UK gambling regulators have hit online bingo operator Stride Gaming with a £7.1m penalty for anti-money laundering (AML) and social responsibility failures.
On Tuesday, the UK Gambling Commission (UKGC) announced the £7.1m fine on Daub Alderney, part of the Stride Gaming Group. The fine was nearly twice the sum that Stride said it was putting aside in September following a regulatory review “of the manner in which [Stride] has historically carried on its licensed activities.”
That review determined that Stride had failed to (a) conduct appropriate ongoing monitoring of a business relationship, (b) apply sufficient enhanced customer due diligence measures in certain high-risk situations, (c) keep adequate records of its due diligence checks, (d) establish and maintain appropriate and risk-sensitive policies and procedures, and (e) properly train staff on recognizing and dealing with potentially dodgy customer transactions.
Stride copped to its shortcomings, including failing to conduct the necessary inquiries regarding 742 customers’ source of funds (SOF). Stride subsequently froze 63 of these accounts due to a lack of satisfactory SOF information.
Stride has since appointed a Risk & Regulatory Compliance Committee, a new Director of Compliance, a Fraud & Risk Training and QA manager and other additional compliance hires.
The UKGC also found “significant limitations” in Stride’s “ability to proactively identify and mitigate risk” of problem gambling behavior by its customers. Staff weren’t adequately trained, and “insufficient resources” had been allocated to identifying patterns of questionable behavior.
Finally, Stride suffered a “technical failure” between July 1 and September 1, 2017 that prevented 98 self-exclusion emails and 30 problem gambling emails from reaching customer service. As a result, 73 customers deposited an additional £17,830 and continued to gamble. Stride has since refunded this money.
UKGC exec director Richard Watson said Stride’s spanking was “part of an ongoing investigation into the online casino sector. The operator’s standards did not match the protections required, and this fine reflects the seriousness of these lapses.”
Stride’s trip to the woodshed came just days after UKGC CEO Neil McArthur gave a speech in which he urged gambling operators to “join the race to the top.” McArthur warned licensees that the regulator expected them to “approach the minimum requirements we impose as exactly that: minimums not maximums.”
In June, McArthur had warned licensees that they faced a “relentless escalation” in fines if they didn’t up their compliance game. Stride’s penalty is the second-highest financial penalty that the UKGC has issued, behind only the £7.8m imposed on 888 Holdings in August 2017.