Failure to check funds
The UK Gambling Commission has punished Casino 36 with a penalty of ￡300,000 ($376,000, €334,000) for a range of offenses including money laundering failures and poor customer protection.
The UKGC issued a statement on July 11 in which it said Casino 36 “had failed to ensure adequate customer enhanced due diligence (EDD), source of funds (SOF) and source of wealth (SOW) checks were carried out for 33 customers.
“Casino 36 also failed to ensure sufficient customer interaction was taking place when customers were potentially displaying signs of suffering gambling harm.”
The financial settlement of ￡300,000 for the breaches will see Casino 36 pay ￡152,259 ($191,000, €170,000) in lieu of a financial penalty for breaching the License Conditions and Codes of Practice (LCCP). It is also divesting ￡147,741 ($185,000, €165,000) of monies received.
Casino 36 will make a further payment of ￡18,648 ($23,000, €20,700) toward the cost of the investigation.
The regulator has also ordered Casino 36 to retrain its personal management license holders to prevent further such license breaches. They must undertake annual training on anti-money laundering regulations.
Other staff must also undergo annual training.
The UKGC also attached more conditions to Casino 36’s license, which include appointing an independent chair to its compliance committee who will audit the casino’s internal controls at least once a year. The casino has also agreed to run full compliance audits on its top 100 customers at any given time. The audits will be conducted by an external auditor who will report to the UKGC within one month, including recommendations.
The investigation
The UKGC’s investigation began in October 2018, when it suspected that Casino 36 was in breach of its license conditions. The regulator also suspected that the casino might be unfit to continue to offer casino games, bingo, and sports betting.
The investigation uncovered multiple failures at Casino 36, which is based in Wolverhampton, England, and has a second casino in Stockport.?The company failed to check sources of funds belonging to the 33 individuals mentioned. It also failed to perform proper due diligence under the “know your customer” rules.
The ￡147,741 divested is the total amount these customers spent as the casino between November 2017 and October 2018. The investigation further revealed that even when senior managers uncovered the breaches in February 2018, they failed to take steps to prevent them from recurring.
The commission also noted that Casino 36 had failed its social responsibility obligations, but not taken appropriate action to identify and interact with customers who appeared to have gambling problems.
Richard Watson, the executive director of the UKGC, said: “As a result of Casino 36’s failings stolen money could have flowed unchecked through their casino and vulnerable customers were placed at risk of harm.?This is simply not acceptable.
“Operators have to understand their customer base. This can only be achieved if they know their customers and ask the right questions to meet both their anti-money laundering and social responsibility obligations.”
Casino 36 admits failures
The casino responded to the UKGC’s investigation with a lengthy statement, in which it admitted its failings.
The statement said: “Casino 36 accepts there were weaknesses in its AML policies and procedures and its responsible gambling policies and procedures, which meant there were breaches of the license condition and SR codes.
“Casino 36 acknowledges certain policies in force at the relevant time were ineffective. It had already evolved those policies, and that process remains ongoing.
“Casino 36 recognizes there have been considerable learnings from these cases and has invested in improving its AML and responsible gambling processes. Casino 36 states it is also committed to working with the industry to raise standards, particularly in relation to safer gambling.”
It went on to list the 13 regulations it had breached, accepting full responsibility.
The statement concluded: “In forming a view on the suitability of the proposed payment in lieu of financial penalty:?the Commission noted the proposal enabled the case to be settled early; and the Commission did not consider any further adjustment to a financial penalty would have been necessary, either as an additional deterrent uplift, or to ensure the total financial liability was reasonable.”