Gamesys agrees GC settlement over AML and SR failings

12 June 2019

iGaming software developer and operator Gamesys Group has agreed a £1.2m (€1.3m/$1.5m) settlement with the GB Gambling Commission after it was found to have failed to prevent gambling harm and breached UK money laundering regulations.

This followed an investigation by the regulator, from which it identified historical weaknesses that resulted in breaches of the 2007 money laundering regulations, and a failure to comply with Social Responsibility Code Provision 3.4.1. 

The investigation was prompted by reports from the UK police that revealed three customers used stolen funds to gamble between 2014 and 2016. Gamesys, the Commission said, failed to appropriately scrutinise these customers' transactions to identify the source of funds and to determine whether the levels of spending were consistent with their risk profile. 

The failure to apply enhanced due diligence and enhanced monitoring of these individuals amounted to a breach of Regulation 14 of the anti-money laundering controls, the regulator noted. Furthermore, it added, Gamesys ultimately failed to establish and maintain appropriate risk sensitive policies and procedures, as required by the 2007 regulations. 

In addition, Gamesys failed to have effective social responsibility interactions with the three customers, as dictated by Social Responsibility Code Provision 3.4.1. For one of the three, the Commission noted, interactions should have occurred on two occasions, when losses increased, alongside increased time spent playing, and the customer becoming a top depositor. On another occasion, the customer's losses increased again, alongside increased session times, with the customer hitting the daily deposit limit. 

Another of the customers in question told a Gamesys account manager that their spending had decreased as they could no longer afford to play as much. The operator failed to interact appropriately, and allowed the customer to continue using their account for around three months.

The regulator said Gamesys acknowledged its shortcomings and that it failed to comply with licence requirements at the time. Gamesys has also admitted it failed to ensure sufficient customer interaction was taking place when customers were potentially displaying signs of problem gambling. The operator identified and flagged the failings itself, the Commission added.

Gamesys has agreed a settlement package that will see it pay £690,000 in lieu of a financial penalty, which will be used to fund the National Strategy to Reduce Gambling Harms. It will also repay £460,472 stolen by the three players to fund their gambling, as well as contributing to the Commission's investigation costs.

“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," Gambling Commission executive director Richard Watson said.

“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 ruling comes after the Commission last week stripped Malta-licensed operator MaxEnt Limited, trading as Maxent NRR Entertainment, of its UK operating licence following a change in ownership. The Slotty Vegas operator has since stated that it intends to appeal the decision.