Warning to Gambling Operators

The Gambling Commission has issued a warning to Gambling operators that they will face the full consequences of regulatory failures even if breaches occurred prior to a change of control.

The warning comes after Daub Alderney (which runs aspers.com, kittybingo.com, luckypantsbingo.com, luckyvip.com, magicalvegas.com, regalwins.com and spinandwin.com and was acquired by Rank in October 2019) was issued with a £5.85m fine following a Gambling Commission investigation which revealed social responsibility and anti-money laundering failures.

Social Responsibility Failings

During its investigation, the Gambling Commission found that Daub Alderney had neglected to put into effect policies and procedures for customer interaction where it had (or should have had) concerns that a customer’s activity might indicate problem gambling. Examples included:

  • a customer who lost £43,410 in four months (despite displaying problem gambling harm indicators such as using 4 different payment cards in one day and reversing £133,873 in requested withdrawals);
  • a second customer who lost £40,500 in one month, during which the operator sent the consumer just two safer gambling messages and one pop up message (which were not evaluated for effectiveness); and
  • a third customer who lost £39,000 over a 3-and-a-half-month period who received just one safer gambling message and two pop ups which, again, were not evaluated for effectiveness.

Anti-money laundering Failings

During its investigation, the Gambling Commission also uncovered inadequate policies, procedures and controls in place to prevent money laundering and terrorist financing, including:

  • a customer being allowed to deposit £50,000 before the operator sought source of funds evidence;
  • another customer being permitted to deposit £41,500 in a month without supplying adequate source of funds evidence; and
  • a third customer being permitted to deposit (and lose) £53,000 over an 8-month period. During that time the only source of funds evidence obtained by the operator was to establish that the customer lived in a house estimated to be worth £233k.

The Commission recognised that a good proportion of these failures occurred before Rank took control of the business in October 2019 and that there had been improvements since the acquisition, but added that a Licensee’s culpability, and the requisite penalty reflecting that culpability, cannot be affected by the fact that its shares have now passed from one set of investors to another. The Licensee does not escape or mitigate the consequences of its actions because its shares are sold.

For any regulatory advice in the gambling sector please contact our Arianne King at aking@costiganking.com