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The United Kingdom Gambling Commission (UKGC) has fined the online casino group, Videoslots Limited, headquartered in Malta, a penalty of £2m due to violations of regulatory compliance.This monetary penalty comes in the wake of an investigation conducted by the UKGC into the operations of Videoslots. The investigation revealed that from October 2019 to February 2022, the company was not in compliance with its LCCP obligations. The firm was found guilty of inefficient AML procedure implementation and failing to engage with customers to mitigate harm related to gambling activities.
Second UKGC Fine
This is the second occasion Videoslots has faced regulatory action; previously, in August 2019, the company was issued a £1m fine due to KYC process shortcomings. The most recent inquiry by the Commission discovered lapses in both social responsibility and anti-money laundering procedures.The company’s social responsibility failures encompassed inadequate identification and management of customers demonstrating problematic behaviour and potential harm from gambling activities.The public statement of the investigation reported a case where a customer deposited £112,225 and lost £58,725 between 21st November 2021 and 7th January 2022. This customer raised red flags such as prolonged gambling sessions, gambling during early morning hours, and losses exceeding thresholds relative to their declared wealth source.
AML Failures
The investigation also noted failures in AML procedures, such as significant delays in implementing risk-based processes, failure to meet customer due diligence requirements, and a lack of sufficient AML analysts to handle the required data volume or perform AML account reviews as per standard procedures.
The report mentioned, “A certain customer, referred to as ‘Customer A,’ set off several AML alarms and managed to deposit £112,225.” It added, “However, AML analysts did not effectively carry out all actions required as per the licensee’s AML policies and procedures. Similar lapses were observed with other customers.”
The Commission expressed its concerns about Videoslots repeatedly disregarding alerts about ineffective AML measures, lack of sufficient AML analysts, negligence in customer due diligence, and failures in identifying and restricting customers susceptible to gambling harm.Videoslots has admitted to its shortcomings, attributing them to the “severe impact” of the Covid pandemic on its operational capacity during the relevant period.The agreed-upon regulatory settlement of £2m comprises a £1,505,158.02 payment in lieu of a financial penalty intended for socially responsible causes, £494,841.98 as divestment, and £11,308.00 towards the Commission’s investigation costs.Considering the seriousness of these violations, there are apprehensions that other customers might have been impacted by Videoslots’ actions. Aggravating factors include the prolonged nature of the violations, some lasting one year and nine months, and the repetition of errors similar to those in previous cases dealt with by the Commission.In conclusion, the enforcement team of the UKGC underscored the importance of operators learning from compliance failures and providing proper staff training to identify AML and social responsibility shortcomings.The enforcement team stated, “This case serves as a stern reminder to all operators of the critical importance of strict adherence to regulatory compliance.”