The crackdown on UK online gambling companies operating without “effective standards” has resulted in fines of nearly £14 million ($17 million) for three online casinos, while a fourth firm has to cease operating in the country.
On Thursday, the UK Gambling Commission (UKGC) said the three companies—Daub Alderney, Casumo, and Videoslots—failed “to put in place effective safeguards to prevent money laundering and keep consumers safe from gambling-related harm.” Daub Alderney was ordered to pony up £7.1 million ($9.06 million), while Casumo has to pay £5.85 million ($7.4 million) and Videoslots would pay £1 million ($1.28 million) in lieu of financial penalty.
The fourth company, CZ Holdings, surrendered its license to the gambling regulator following the review. The UKGC also issued Advice of Conduct letters to nine other operators, while a further six remain under investigation.
The review, which started in February as part of the regulator’s probe into how the gambling industry addresses problem gambling and money laundering, found that Videoslots only conducted basic checks on customers who reached €2,000 ($2,278) deposit level within a 24-hour period—an inadequate approach “as it means that the same approach is adopted for all customers irrespective of the level of risk attributed to the customer,” according to the UKGC.
It was also discovered that while Videoslots made initial inquiries into its customers’ source of funds, it failed to continue to make checks and in one instance, a customer who failed the platform’s automated identity checks provided a fraudulent driving license, which was not detected by the company. This resulted in the customer being able to register multiple fraudulent bank cards that was used to deposit and play large amounts of funds without intervention by Videoslots. After Videoslots’ systems alerted the company about the activity, the customer had already made £17,405 ($22,223) in deposits, “suspected to be the proceeds of crime.”
Like Videoslots, Casumo was also found to have failed in checking its customers and monitoring their activities properly. In its review, which began in January, the UKGC discovered three customers that showed potential signs of problem gambling, but did not trigger any action from Casumo.
In a statement, Casumo said it has already taken a “proactive action to become fully compliant” prior to the review. Oscar Simonsson, co-founder and CEO of Casumo, said: ““In the past year, we have made several key staff appointments to our Legal and Compliance teams, have invested in automated technology to identify and assess potential risks and have worked with some of the world’s leading experts on behavioural addictions on internal processes and external tools, including the ‘Casumo Cares’ website.”
In early November, the gambling regulator announced that it was fining Daub Alderney whose monitoring of customers was revealed to have been inadequate. The operator has since tightened its procedures.
With Thursday’s announcement, UKGC Commissioner Neil McArthur hopes that all online casino operators will “sit up and pay attention,” saying, “It is not enough to have policies and procedures in place. Everyone in a gambling business must understand its policies and procedures and take responsibility for properly applying them. We expect operators to know their customers and to ask the right questions to make sure they meet their anti-money laundering and social responsibility obligations.”