Some Gibraltar-licensed online gambling operators have agreed to pay £2.5m as penance for their shoddy anti-money laundering (AML) controls.
On Wednesday, the Gibraltar government’s Gambling Division announced the completion of a 12-month ‘thematic review’ of its customer-facing online gambling licensees’ AML risk assessment processes and controls with respect to the companies’ non-UK international customers.
The review identified “a number of historical control weaknesses,” including risk tolerances that were “too great” as well as “slow or ineffective” timing on interventions. “Several” operators were found to have accepted deposits from an individual who’d stolen the sums from their employer, then forged documents and provided bogus information to explain the source of their wealth.
The review warned all licensees to conduct enhanced due diligence on their high-rolling customers “irrespective of whether or not their losses are high.” Operators must also have tools to identify “sudden and significant increases in the velocity of transactions” and to ensure that management is made aware of these increases to determine whether further action is required.
Operators must also conduct proper risk assessments for customers funding any type of gambling account, including peer-to-peer verticals such as poker and exchange betting.
The regulator noted that the “full and frank cooperation” of its licensees along with “agreements to divest profits which represent the proceeds of crime” meant no further action would be taken against the operators flagged by the review. However, “a number of operators” have agreed to pay a total of £2.5m to the Gibraltar Gambling Care Foundation.
Gibraltar’s online gambling industry appeared in doubt following the UK’s Brexit vote to leave the European Union. The uncertainty led to some major operators shifting the bulk of their Gibraltar staff to rival jurisdictions such as Malta to ensure continued access to continental gamblers. However, other operators expressed confidence in establishing a major Gibraltar presence regardless of any Brexit fallout.
In February, Gibraltar Gambling Commissioner Andrew Lyman claimed that Brexit wasn’t the “doom and gloom scenario” many analysts made it out to be, noting that European operators wishing to serve UK gamblers would continue to view Gibraltar as a viable option.