Gibraltar-based online gaming operator Gamesys has agreed to forfeit £460,472 in stolen funds and pay a financial penalty of £690,000 in the United Kingdom for failing to prevent gambling harm and breaching money laundering regulations.

The penalty package from the UK Gambling Commission (UKGC) follows an investigation into the operator’s processes after police found that three individuals had gambled with stolen funds.

The UKGC said that the operator failed to deliver interaction that could have prevented harm, despite customers displaying behaviour that could indicate problem gambling.

The investigation also revealed that Gamesys failed to comply with money laundering regulations, including not establishing customers’ source of funds.

“It is vital that operators understand their customers - track their online gambling and step in quickly when they suspect someone is suffering from gambling harm,” said Richard Watson, Gambling Commission executive director.

“These key steps and processes ensure they meet both their anti-money laundering and social responsibility obligations for all customers. Gamesys’ approach resulted in a variety of failings and saw stolen money flowing through the business – with customers being put at risk of gambling related harm.”

The investigation focused on three customers between 2014 and 2016, all of whom were the subject of police investigations where it was established that stolen money had been spent on online gaming with Gamesys.

As per the 2007 anti-money laundering regulations in force at the time, Gamesys should have applied enhanced due-diligence measures and ongoing monitoring in situations which present higher risk of money laundering. The company should also have complied with Social Responsibility Code provisions which require operators to interact with customers who display signs of problem gambling.

“Our investigation found, and Gamesys accepts, that there were historical weaknesses in its systems relating to how it managed its customers for anti-money laundering and social responsibility purposes,” said the UKGC.

The regulator also noted that Gamesys made proactive and timely improvements to address the issues identified and was open and transparent from the outset of the investigation, fully co-operating throughout.

The £1.2m penalty package is comprised of a payment in lieu of a financial penalty of £690,000, which will go to the National Strategy to Reduce Gambling Harms, as well as divestment of £460,472 to reimburse identified victims of crime and payment towards the UKGC’s investigative costs.

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