UKGC Imposes Multi-Million Pound Penalties to Operators



Staff member
May 3, 2008
UK Gambling Commission has been warning online casino operators to comply with the new rules and updates for several months now. During these past few months, they have been reminding operators about all the updates and changes in the rules for Responsible Gambling and Dispute Resolution and urging them to be compliant, whilst underlining the fact that the penalties would be cruel.

Yet, operators have not been acting accordingly. For that reason, on Thursday, after underlining once again their warnings, the UK Gambling Commission published the details of two more sanctions they have placed on their operating licensees Casumo and Videoslots. In addition, they have added that one operator surrendered its license issued by the Commission right after the review was instituted. The offender in question is CZ Holdings-operated online casino Dr.Vegas.

These sanctions follow the penalties imposed on several leading UKCG-licensed online casino operators, including Daub Alderney, who received a multi-million-pound penalty, £7.1 million to be exact, due to responsible gambling flaws.

Commission’s Statement

The UK Gambling Commission released a statement saying that nine other operators have been fined in regards to their conduct, and six others are still under an ongoing investigation. The Chief Executive at UK Gambling Commission, Neil McArthur said in this statement that he hopes the announcement regarding the penalties will make all operators consider their actions and start paying attention since the Commission's investigations have found a large number of online casino operators not meeting their responsibilities and obligations.

He added that it is not enough to just have all the procedures and policies in place. He said everyone in the online gambling business must understand their procedures and policies and take full responsibility for applying them properly.

But this does not go for the operators only. The UK Gambling Commission went after companies but individuals as well in their latest round of actions. In fact, two Personal License Holders were reprimanded and four warned regarding their recent conducts, three were required to completely surrender their licenses, while three others are still under investigation.

Explaining their position in this regard, Neil McArthur added that everyone in position of high authority in the online gambling industry needs to be aware that the Commission will not only act against the businesses in entirety when they take regulatory action; they will also hold individual Personal License Holders to account where they are individually responsible for the failings of the operator.

The Secretary of State for Digital, Culture, Media and Sports Jeremy Wright also warned operators that the government stands by the UK Gambling Commission’s stricter online gambling standards and player protections, and praises the penalties imposed. He added that any online operator that thinks can ignore its responsibilities and duties to protect players should take note since there will be some serious consequences. Protecting vulnerable players must be the priority for everyone, both the gambling operators and the government.

The Sanctions for Videoslots

In comparison to Casumo, Videoslots received a less severe sanction, which involved responsible gambling flaws and due diligence faults. They reached a £1 million settlement with the UK Gambling Commission, with an additional contribution to the investigation costs of £12,000.

Not long after the UK Gambling Commission published their statement, Videoslots published one of their own, confirming the settlement. They emphasised the fact that they fully cooperated with the Commission in regards to the review and the settlement on responsible gambling and AML grounds.

The company admitted they had weaknesses in their systems in relation to how they managed their customers for social responsibility purposes and anti-money laundering, and added that they have taken timely and proactive action to address all of the issues found with the investigation.

They said that they have agreed to make a payment to the National Responsible Gambling Strategy project(s) in lieu of a financial penalty, which will help finance research and treatment to address the risk and consequences of harmful gambling and gambling-related activities, as determined appropriate. In addition, the company said that they have already started putting into practice all the lessons learned with the latest review and sanctions.

Casumo’s Case

After warning the operator regarding their lack of risk management, which is part of the anti-laundering precautions and is in breach of its licensing conditions, the Commission imposed a whopping £5.85 million penalty to Casumo. In addition, the Commission found flaws in their KYC requirements and responsible gambling rules compliance.

In addition to the penalty, Casumo is now required to ensure that senior management, all PML holders and the relevant staff members take annual refresher courses, and to employ a Money Laundering Reporting Officer, qualified to do the job in accordance with the procedures and rules.

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