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The UK Gambling Commission (UKGC) has announced action against BGO Entertainment, GAN Plc and NetBet Enterprises Ltd after reviewing their licences following a number of failures which included not doing enough to keep consumers safe and failing to prevent money laundering and criminal spend.

As a result of those reviews, two of the businesses, BGO and Gan PLC, have had new conditions imposed on their licences and all three will now improve their policies and procedures as well as making payments to progress the work of the National Strategy to Reduce Gambling Harms.  

The Commission will also be reviewing the actions of the individual Personal Management Licence holders in all three of these cases

Firstly, BGO – which will pay £2 million to support the strategy – was deemed to have held systemic failings with its social responsibility and AML controls, which affected a number of customers playing on its online casino properties.  

In its executive summary of BGO’s licence, the UKGC highlighted that the operator had failed to undertake ‘enhanced due diligence’ on its top 250 customers, a key condition that operators must fulfil under UK Money Laundering Regulations of 2017.

Furthermore, BGO is reported to have maintained inadequate record-keeping of customer interactions and its responsibility checks.

“BGO accepted that between 25 September 2018 and 23 March 2020 it did not have effective policies and procedures in place for customers who may be displaying signs of problem gambling,” the Commission documented.

The report highlighted two high-value customers that had deposited over £100,00O in a matter of days, eliciting ‘RG triggers’ that the BGO had minimally responded to with ‘pop-up questionnaires’ and no duty-bound customer care interventions.

On ‘failure to have appropriate AML controls’, the Commission reported that it had found multiple instances where BGO customers could deposit and wager large sums of money without any enhanced due diligence (EDD) and source-of-funds (SOF) checks.

BGO had undertaken no appropriate SOF or EDD on a customer that deposited £100,000 and lost £65,000 within seven days, when it was known that the customer had a salary income of less than £20,000’.

Meanwhile, white-label services provider GAN PLC will pay £146,000 having been found to have failed on four conditions related to social responsibility, risk assessment and AML provisions recorded between August 2018 and September 2019.

The UKGC stated that GAN had failed to meet its LCCP conditions on money laundering and terrorist financing risk assessment (CMLTFRA), in which it had accepted bank statements submitted by a customer which were in a different name –  indicating that funds originated from a third party who the licensee knew nothing about.

During its review period, GAN was deemed to have carried out no regular assessment of its AML controls and procedures to mitigate money laundering risks.

Furthermore, the Commission revealed that GAN senior management had not signed-off on policies related to its LCCP required ‘Customer Interaction Guidance (CIG)’ and Social Responsibility Monitoring (SRM) reports.

Final incumbent NetBet will pay £748,000 to progress the National Strategy to Reduce Gambling Harms, as a consequence of inadequate AML controls and significant shortcomings for its responsible gambling policies and procedures.

UKGC findings reported that NetBet had failed to conduct appropriate levels of Enhanced Due Diligence (EDD) on at-risk customers, and in several cases, no EDD was carried out at all.

Further AML and responsibility failings cited that NetBet had not reviewed customer source of funds documentation adequately and that NetBet staff were found to have had no comprehensive training with regards to ensuring key protocols on AML and customer care duties.  

“NetBet has accepted a historic weakness in its implementation of its responsible gambling policy resulting in its processes relating to responsible gambling not being consistently followed by staff,” detailed the notice.

Across all operators, the Commission states that it will review the actions of the individual Personal Management Licence holders in all three of these cases.

Richard Watson, executive director at the Gambling Commission, said: “Licensees must protect consumers from harm and treat them fairly. Our recent investigations uncovered a variety of consumer protection and anti-money laundering failings at each of these three operators and as a result we are using a range of enforcement tools against them. 

“We will continue to crack down on failing operators through our tough and proactive compliance and enforcement work.”