Raising Standards for consumers - Compliance and Enforcement report 2020 to 2021

The Gambling Committee This report on the report on compliance and execution measures from 2020 to 2021 indicates valid information and guidance at the time of issuance.

Publishing date: December 9, 2021

Last update: May 23, 2024

Printing or saving date of this version: September 8, 2024

Online version: https: // www. GamblingCommission. Gov. Gov. UK/Report/Raising-ports-for-consumers-to consumers-end-enforcement-report-2020-n

Enforcement and Compliance report foreword

This year, the Gambling Committee continued to take powerful measures for businesses that did not meet the required criteria, which was one of the busiest years for the execution and compliance team. The COVID-19 caused a global confusion, but the compliance team and the execution team continued to work throughout.

Our case has led to the suspension of five operators licenses and the cancellation of the license of one operator and nine personal operator licenses.

As a result of a fine or regulatory authority, a total of £ 15 gambling was paid by 15 gambling operators.

As a result, a full assessment was conducted for online operators and five ful l-scale assessments for land operators.

In addition, 83 site reviews and 262 safety audits were conducted. Approximately 29 personal license screenings were started, and 57 cases were completed.

Over the past two years, we know that Cobid 19 had a serious impact on both consumers and companies, and it was a difficult situation. During this time, we have regularly collected data and strengthened consumer protection based on the data. As a new CEO of the European Commission, I am impressed by the amount of encouragement so far, but I feel frustrated that it should be necessary. Looking back at the encomotment from 2020 to 2021, almost all cases have the same two weaknesses.

These rules exist for two reasons to protect people and prevent crime from gambling. These rules support two of the three licenses that are impossible to recognize gambling like the 2005 gambling method (open on a new tab). Therefore, compliance must be the top priority of all operators.

The reason for such failures is almost the same as the failure itself. Our examples clarify that the operator is not able to use the appropriate resources, and that it has prioritized commercial purposes over regulations.

This is simply unacceptable, and it will be seen by other people in the industry who are working hard to achieve compliance.

Of course, many gaming companies have spent a year and a half tough time, and we know that the future of many companies was unclear. A severe decision was made to protect employment and life. Although the threat of COVID-19 has not disappeared, the gaming sector has almost recovered. As a British gambling industrial regulation authorities, we still see too many violations of regulations that anyone in the industry should not see. The industry has resources, skills, and knowledge to change it.

The committee's execution and compliance work will continue to emphasize customer protection, as consumers naturally expect. This is to pay special attention to the new products, so the business operator meets the requirements of LCCP, and the European Commission's current money laundering prevention and dialogue with customers (updated shortly after discussions on this issue). By considering the integration (planned to be integrated), there is a wide variety of things, from checking whether to protect customers.

We hope that this report will be useful and timely alerted for how the European Commission is trying to secure regulations. I look forward to cooperating with everyone to make gambling safer, fair, and have no crime.

Anti-money laundering and counter terrorist financing

Introduction

I understand that COVID-19 has brought the industry to the industry, such as the problem of the gambling problem and the significant impact of the land-based operators, but there is no crime or crime revenue in gambling. Maintaining is still a great interest.

Issues identified through casework

Last year (2019 to 2020), important and meaningful evaluations were continued for both land bass and online gambling operators. Compliance activities and execution examples include a number of cases issued by the European Commission and continuous guidance to support business operators, but also specific licensed risk evaluation and mane laundering (ML) and terrorist funds. It indicates that policies, procedures, and management are still inadequate.

The contradicated expenditure and expenditures that are inconsistent with the obvious source of income may indicate both money laundering, similarly problematic gambling, or both.

Common poor practices

Inadequate due diligence measures:

Insufficient customer duedolgement (CDD), reinforced duedolgement (EDD), and insufficient KYC (Know Your Customer) checks are applied repeatedly.

Failure to fully consider the full range of circumstances in which EDD is to be applied:

For example, the ML/TF risk is higher, as is required in the rules 33 of the rules 33 (opened on a new tab) 2017 (information about the payment of the paymenters), which is required. Examples include political exposed people (Peps) and EDD leaks to customers living in hig h-risk lodgings. In the European Commission's casino and no n-casino guidance, it is stated as follows:

Hig h-risk customers should have a higher frequency and depth scrutiny than applied to lo w-risk customers.

Failure to take account of:

Money laundering and terrorist funding risks in the British gambling industry
Guidance for no n-warinds and remote casinos related to ant i-money laundering
Obligation and responsibility based on the 2002 Criminal Benefits Law (POCA) (guidance for no n-casino pelators)
Hig h-value customer: industry guidance
License conditions 12. 1. 1. (3) License conditions and practical norms (LCCPS) requested by operators to consider applicable learning or guidance published by the Committee.
The risk identified by the risk assessment of the committee on money laundering and terrorist funding in the British gambling industry.

Operators for reference to guidance and advice issued by the committee: We operators have the latest guidance and advice we provide, and based on their guidance and advice, ML Risk Assessment and / / / / / / / / / / I hope to update / / / / / to update TF risk assessment (with the policy, procedure, management).

Over reliance on third party providers to conduct due diligence checks:

Remote casino operators did not control to supervise the activities of third parties. In the European Commission's ant i-legal conceitization casino guidance and the European Commission's ant i-legal adequacy guidance, it is described as follows:

Businesses should take into account the risks of money londaling, which is brought about in relationships with businesses, including third parties.

Licensee is responsible for the actions of a third party who has signed a contract about providing all aspects of licensing business related to licensing activities.

Delayed customer identification checks:

There is still evidence that a remote operator is performing authentication check after the customer is allowed to play. This is a violation of the license condition 17. 1. 1 (1):

Licensee must obtain and confirm information to confirm the identity of the customer before the customer is allowed to play.

Commercial considerations overriding the need to comply with AML and CTF provisions:

As part of the Commission's ongoing compliance and enforcement activities, the Commission has encountered ML and TF risk assessments that place more emphasis on areas such as adverse media coverage and reputational damage to activities. There are examples where operators state that negative publicity will occur if they do not comply with social responsibility and AML/CTF requirements, but the operator's primary concern should be how to mitigate ML and TF risks.

Operators having no clear methodology in place in their ML and TF risk assessments:

By implementing inadequate risk assessment methods, operators are unable to fully gauge the extent of ML and TF risks associated with their operations (leading to weak policies, procedures and controls).

Vague references made in operator ML and TF risk assessments:

Such risk assessments include statements such as "customer monitoring" and "KYC checks" being implemented, but no details of these measures are provided. Other issues include statements such as "no prepaid cards or cryptocurrencies will be accepted", but no details are provided on how the operator prevents such payments or payment methods.

Problem gambling, ML, and TF:

There are repeated examples of operators not considering how problem gambling can be linked to ML and TF. The European Commission's Casino and Anti-Money Laundering Guidance states:

Increased expenditure or patterns of expenditure inconsistent with an apparent source of income may indicate money laundering, as well as problem gambling, or both.

High financial thresholds in place before CDD or EDD measures take place:

There have been repeated cases where high and arbitrary triggering financial thresholds have been set by operators without any supporting evidence. Such high financial thresholds have repeatedly led to CDD and EDD delays, leading to financial crimes that should have been detected much earlier in the customer journey.

High financial thresholds based on losses, deposits, or winnings only:

One remote operator only conducted an EDD count when a customer submitted losses of £12k in a year. The European Commission's Casino and Anti-Money Laundering Guidance states:

In order to be able to detect customer activity that may be suspicious, it is necessary to track all transactions or activities.

And Regulation 27(5) provides that:

A transaction consists of "the deposit of funds ... or the withdrawal of profits (including the withdrawal of funds)".

The ML/TF risk assessment not being fully used to inform policies, procedures and controls:

Licence Condition 12. 1. 1 requires undertakings to develop and carry out ML/TF risk assessments, which should be used to develop and implement policies, procedures and controls to prevent financial crime.

Our requirements

All licensees are required to fully comply with their licence conditions on Anti-Money Laundering (AML) and Countering Terrorist Financing (CTF). Casino licensees must further comply with the requirements of the Money Laundering, Terrorist Financing and Transfer of Funds (Payer Information) Regulations 2017 (opens in a new tab), including amendments made by the Government in 2020 and 2021.

Licensees should also take note of the various guidance documents available on the AML section of the European Commission's website. We also provide regular updates on AML and CTF on our website, social media and in our bi-weekly e-newsletter.

The European Commission continues to see repeated instances of companies failing to review their risk assessments to take account of the Commission's new risk disclosures. We continue to see inadequate due diligence controls that increase the risk of accepting illicit funds (including proceeds of crime and terrorist financing).

Such failure by operators to take into account the European Commission's publications on new risks may also fall foul of PoCA and the Terrorism Act 2000 (opens in a new tab), which requires operators to submit suspicious activity reports (SARs) to the UK Financial Intelligence Unit if they have knowledge or suspicion of ML or TF.

To mitigate this risk, operators should take into account guidance issued by the European Commission and applicable knowledge such as the Emerging Risks Report. Operators should update their risk assessments, policies, procedures and controls, and update employee training, taking into account the guidelines issued by the European Commission to enhance consumer protection and reduce money laundering in gambling.

An area for further focus for the European Commission is to improve the standard of operators understanding their obligation to report suspicions or knowledge of money laundering or terrorist financing in their operations. Although onshore establishments' submissions were affected by the pandemic, SARs were still submitted this year.

According to European Commission data (related to Covid-19), 53% of remote and non-retail casinos and only 4% of non-casino businesses (betting, slot machines, lotteries, arcades, bingo) were NCAs (opens in a new tab). Focusing on the adequacy of the reporting of designated officers and AML officers to understand and fulfil franchisee obligations will be an ongoing focus for the European Commission's AML team.

Companies should also continue to focus on the quality of the SARs they submit. It is a good idea to refer to the National Crime Agency's guidance and watch their video on how to submit higher quality SARS.

Case studies

Furthermore, in our compliance and enforcement activities, we found the following areas related to money laundering and terrorist financing at one land-based casino:

Cashier tried to give a sealed packet of cashier registers that a customer stated was from another casino operator. During the investigation, this was not substantiated.
A customer deposited £20. 000 in cash on two occasions, later found to have provided false identity documents.
A customer from a high-risk jurisdiction and belonging to an organized crime group used cybercrime money at a high-profile casino.
A casino's policy was to request the source of funds after a customer had visited the casino 20 times.
A casual customer tried to exchange large amounts of Swiss Francs and Euros but refused to provide the source of funds (exchange services can be attractive targets for money laundering).

Online Licor compliance and enforcement activities uncovered:

An organized crime group targeted at least 28 online operators (including casinos) using various identities (possible "Mule" account activity) to deposit large amounts of 675. 01 that were accepted by online betting operators.
A customer from a high-risk third country was found to be in possession of prepaid cards under 36 different identities, some of which were linked to gambling activities at online betting operators.
It has been discovered that 4, 218 customers linked to one betting operator did not pass proper 'KYC' checks.
A financial adviser stole around £15 million from wealthy clients to fund his gambling addiction across multiple operators.
One customer deposited more than £ 100. 000 and lost more than £ 65. 000 in seven days. It was found that the customer's salary was less than £ 20. 000, but did not show the right source or property in property.
One operator did not have customers with appropriate risk profiles from the beginning of business, but rely only on financial factors to manage AML risk.
The operator continued to accept customers' claims that funds are recycling profits without considering AML risks without independent verification or objection.
Similarly, the excessive corrected bank trading detailed text was accepted as sufficient evidence by customers. In one case, a customer deposited more than 400 pounds, which seemed to be recycling profits from February to August 2020, and lost more than 190 pounds. The account was ultimately closed due to lack of funding source.
SAR is filtered through team leaders, not directly sent to MLRO.

The following Good Practis was confirmed by the compliance evaluation of an online casino operating company:

The new registered customer account was blocked when the total deposit was reached £ 250 on the opening date.
The account was blocked until the customer profile information was required and the information was provided.
Customers provided basic information on occupation and salary.
Based on the provided information, the monthly net loss limit is set in the account, taking into account the discretionary income.
An aggressive dialogue with the customer was held and the account was resumed.
The operator recognized it as a disability, as the customer repeatedly demanded the monthly net loss limit, and stopped his account until the dialogue was performed.
The account will not be resumed until the dialogue with the customer succeeds.

Our notable enforcement cases

The following measures and regulations were imposed on these operators:

Double Diamond Limited was asked to pay the settlement of regulators for AML and social liability default. The breakdown of the settlement is paid by £ 247. £ 247, and this fine is used to fulfill social responsibility and accelerate the achievement of national strategies to reduce harmful gambling damage. < SPAN> A customer deposited more than £ 100. 000 and lost more than £ 65. 000 in seven days. It was found that the customer's salary was less than £ 20. 000, but did not show the right source or property in property.

One operator did not have customers with appropriate risk profiles from the beginning of business, but rely only on financial factors to manage AML risk.

The operator continued to accept customers' claims that funds are recycling profits without considering AML risks without independent verification or objection.

Similarly, the excessive corrected bank trading detailed text was accepted as sufficient evidence by customers. In one case, a customer deposited more than 400 pounds, which seemed to be recycling profits from February to August 2020, and lost more than 190 pounds. The account was ultimately closed due to lack of funding source.

SAR is filtered through team leaders, not directly sent to MLRO.

The following Good Practis was confirmed by the compliance evaluation of an online casino operating company:

The new registered customer account was blocked when the total deposit was reached £ 250 on the opening date.

Guidance and lessons learned

The account was blocked until the customer profile information was required and the information was provided.

Customers provided basic information on occupation and salary.

Based on the provided information, the monthly net loss limit is set in the account, taking into account the discretionary income.

An aggressive dialogue with the customer was held and the account was resumed.

The operator recognized it as a disability, as the customer repeatedly demanded the monthly net loss limit, and stopped his account until the dialogue was performed.
The account will not be resumed until the dialogue with the customer succeeds.
The following measures and regulations were imposed on these operators:

Double Diamond Limited was asked to pay the settlement of regulators for AML and social liability default. The breakdown of the settlement is paid by £ 247. £ 247, and this fine is used to fulfill social responsibility and accelerate the achievement of national strategies to reduce harmful gambling damage. One customer deposited more than £ 100. 000 and lost more than £ 65. 000 in seven days. It was found that the customer's salary was less than £ 20. 000, but did not show the right source or property in property.

One operator did not have customers with appropriate risk profiles from the beginning of business, but rely only on financial factors to manage AML risk.

The operator continued to accept customers' claims that funds are recycling profits without considering AML risks without independent verification or objection.
Similarly, the excessive corrected bank trading detailed text was accepted as sufficient evidence by customers. In one case, a customer deposited more than 400 pounds, which seemed to be recycling profits from February to August 2020, and lost more than 190 pounds. The account was ultimately closed due to lack of funding source.

SAR is filtered through team leaders, not directly sent to MLRO.

The following Good Practis was confirmed by the compliance evaluation of an online casino operating company:
The new registered customer account was blocked when the total deposit was reached £ 250 on the opening date.

The account was blocked until the customer profile information was required and the information was provided.

Customers provided basic information on occupation and salary.

Based on the provided information, the monthly net loss limit is set in the account, taking into account the discretionary income.
An aggressive dialogue with the customer was held and the account was resumed.
The operator recognized it as a disability, as the customer repeatedly demanded the monthly net loss limit, and stopped his account until the dialogue was performed.
The account will not be resumed until the dialogue with the customer succeeds.
The following measures and regulations were imposed on these operators:

AML health-check good practices

Due diligence measures:

Review and update of ML/TF risk assessments:

Les CROUPIERS CASINO LIMITED had to pay a fine by defaulting AML and social responsibility. The amount was £ 202. 500 and £ 14. 794. 62.

Commission guidance:

Shaftesbury Casino Limited had to pay a fine by defaulting AML and social responsibility. The amount was £ 260. 000, £ 11. 690, 41.

ML/TF risk assessment methodology:

White Hat Gaming LTD was required to pay for financial penalty by defaulting AML and social responsibility. The amount is £ 1. 334. 053, 18 pounds and 9. 816, 63 pounds.

Our survey reveals that there was a defect in the AML policy, procedure, and management by NetBet Enterprises Limited, and instead of financial penalty, the total amount was £ 748.

Regulatory officials confirmed that there was a systematic defect in the governance system of Caesters Entertainment UK Limited (CEUK), resulting in a breakdown between the company and the licensed entity. The process aimed at preventing ML and protecting the vulnerable was also serious. AML and social responsibilities are expected to be introduced to prevent gambling crimes and protect the vulnerable. CEUK paid a total of 13 million pounds instead of a fine.

High financial thresholds:

Operators need to well understand these statements and other statements published by the European Commission. These statements highlight the weaknesses of the AML and CTF measures taken by the operator, and emphasize the standards for the European Commission and the British law to comply with operators.

Staff supervision:

The European Commission will publish official guidance and advice that businesses will be considered to consider LCCP requirements for sure. In the first lockdown, a remote operator issued an additional guidance on how to comply with LCCP3. 4. 1 on dialogue with customers: The Gambling Committee takes more strict measures to protect consumers. Leading.

Casino sector:

Subsequent discussions on social responsibility code 3. 4. 1 and further amendments of related guidance were held: Consultation and evidence recruitment (opened in new tabs).

At this stage, all official guidance on customer response to remote businesses will be updated and integrated into formal guidance documents.
The Commission has also issued publications providing further details on problem gambling, reducing the risk of harm from problem gambling and the measures it is taking to raise standards:
Problem gambling and gambling-related harm (explaining the difference between problem gambling and gambling-related harm)
Risks arising from Covid-19 and the Commission's response
National strategy to reduce gambling-related losses

This year has also seen the misuse of government priority schemes by gambling consumers, through the explicit misuse of Bounce Back Loans and the Self-Employed Income Support Scheme to use for online gambling. Key indicators of this risk were identified and shared through the Commission's emerging risk bulletin, which in particular highlighted the risk that problem gambling and financial crime are co-dependent issues. Operators were expected to review the Commission's publications during this reporting period and mitigate these emerging risks by reviewing and amending their risk assessments, policies, procedures, controls and employee training to strengthen consumer protection and reduce money laundering in gaming.

Nominated Officer:

In October 2020, the European Commission introduced new license conditions on AML and CTF:

License Status 15. 1. 3 - Reporting of suspected violations (all non-remote casinos, non-remote bingo, general schemes, adult gaming centres, family entertainment centres and remote authorised (commercial rooms only)

License Status 15. 2. 3 - Other reportable events (all non-intermediate and remote casino licenses)
The Commission also amended the following license conditions:
License Conditions 15. 1. 1 and 15. 1. 2 - Reporting of suspected violations
License Conditions 15. 2. 1 and 15. 2. 2 - Reporting of events (all licenses)
Examining the impact and effectiveness of these new and amended license conditions, and the extent to which the industry has incorporated them into its daily operations, will be the focus of the European Commission going forward.

All the above highlights the need for operators to:

Licensed operators and financial stability

Introduction

Implement a risk-based approach

Implement robust due diligence and strengthen due diligence controls.

Our requirements

ML/TF Ensure risk assessments and policies, procedures and controls adequately mitigate ML/TF risks.

Comply with and keep up to date with customer interaction requirements and take into account current official guidance relevant to the sector.

Providing strong and latest employee training.

Take powerful KYC/CDD and EDD measures to monitor customer activities. This includes only the no n-basic activation of AML and the dialogue with the customer in the financial threshold. Operators should consider various risk factors when performing customer risks, trading risks, and product risks. Operators should also be convinced of the full range of risks that they could be exposed. For example, it would be useful to carry out information audits for open source such as local or news.
Review and update ML/TF Risk Assessment according to changes in situations including new products and new technologies, new payment methods by customers, changes in customers, and other significant changes. Then, based on the change of ML/TF risk evaluation, the operator's policy, procedure, and management system should be updated as appropriate.
Consider the guidelines adopted by the European Commission to formulate and develop ML/TF risk assessment. Then, use this risk assessment to formulate and implement policies, procedures, and management measures.
The operator must have a clear risk assessment method. Ant i-money laundering guidance to casinos and no n-casinos demands that operators consider the following:
... The characteristics, sources, potential, impact, result of the specified risk or risk facto r-assign relative value or importance to each risk or risk factor.

Orderly close-down of businesses

The current risk assessment of the European Commission on the Gambling Industry evaluates the risks of ML and TF from the viewpoint of "possibility" and "impact." < SPAN> Providing strong and latest employee training.

Take powerful KYC/CDD and EDD measures to monitor customer activities. This includes only the no n-basic activation of AML and the dialogue with the customer in the financial threshold. Operators should consider various risk factors when performing customer risks, trading risks, and product risks. Operators should also be convinced of the full range of risks that they could be exposed. For example, it would be useful to carry out information audits for open source such as local or news.
Review and update ML/TF Risk Assessment according to changes in situations including new products and new technologies, new payment methods by customers, changes in customers, and other significant changes. Then, based on the change of ML/TF risk evaluation, the operator's policy, procedure, and management system should be updated as appropriate.
Consider the guidelines adopted by the European Commission to formulate and develop ML/TF risk assessment. Then, use this risk assessment to formulate and implement policies, procedures, and management measures.
The operator must have a clear risk assessment method. Ant i-money laundering guidance to casinos and no n-casinos demands that operators consider the following:

Lessons learned

Businesses in administration

... The characteristics, sources, potential, impact, result of the specified risk or risk facto r-assign relative value or importance to each risk or risk factor.

The current risk assessment of the European Commission on the Gambling Industry evaluates the risks of ML and TF from the viewpoint of "possibility" and "impact." Providing strong and latest employee training.

Take powerful KYC/CDD and EDD measures to monitor customer activities. This includes only the no n-basic activation of AML and the dialogue with the customer in the financial threshold. Operators should consider various risk factors when performing customer risks, trading risks, and product risks. Operators should also be convinced of the full range of risks that they could be exposed. For example, it would be useful to carry out information audits for open source such as local or news.

Review and update ML/TF Risk Assessment according to changes in situations including new products and new technologies, new payment methods by customers, changes in customers, and other significant changes. Then, based on the change of ML/TF risk evaluation, the operator's policy, procedure, and management system should be updated as appropriate.

Consider the guidelines adopted by the European Commission to formulate and develop ML/TF risk assessment. Then, use this risk assessment to formulate and implement policies, procedures, and management measures.
The operator must have a clear risk assessment method. Ant i-money laundering guidance to casinos and no n-casinos demands that operators consider the following:
... The characteristics, sources, potential, impact, result of the specified risk or risk facto r-assign relative value or importance to each risk or risk factor.

The current risk assessment of the European Commission on the Gambling Industry evaluates the risks of ML and TF from the viewpoint of "possibility" and "impact."

Anti-Money Laundering Guidance for Casinos and Non-Casinos states that "... there are no minimum financial limits for controlling and reporting known or suspected money laundering or terrorist financing activities". By having high financial limits, operators run the risk of breaching the requirements of the LCCP, the Money Laundering, Terrorist Financing and Transfer of Funds (Payer Information) Regulations 2017 (opens in a new tab), the Proceeds of Crime Act 2002 (opens in a new tab), the Terrorism Act 2000 (opens in a new tab) and the Gambling Act 2005 (opens in a new tab). ML triggers should be reviewed to ensure they are fit for purpose, including rigorous checks on individuals at appropriate times, aligned with the licensee's specific business risks.

Are table games and gaming machines adequately monitored to minimise the risk of ML, criminal living expenditure, fraud and collusion?
Casinos face some enhanced legal responsibilities under the Regulations (as they are part of the financially regulated sector). These include policies, procedures and controls which must be reported in detail:
Risk management practices

Internal controls

Customer due diligence (CDD) monitoring and continuous monitoring (including enhanced measures for high-risk customers

Special measures and licence suspensions

Special measures

Introduction

Reliability and record keeping

Issues identified through casework

Compliance monitoring and controls, and internal communications about these policies, procedures and controls.

For further information which casinos should include in their policies, procedures and controls, please see the Casino Guidelines.

Our requirements

Casinos must appoint a company member as a designated officer and a director (or equivalent) as compliance officer.

Rule 21 requires casino operators to:
Appoint a person who is a member of the board of directors (or, if there is no board, the equivalent governing body) or senior management as the person responsible for ensuring that relevant persons comply with these Rules.
Establish an independent audit department responsible for reviewing and evaluating the appropriateness and effectiveness of the policies, controls and procedures adopted by the casino.

Appoint a designated officer with the necessary skills, knowledge and expertise to fulfil that role. The Anti-Money Laundering Guidance for Casinos and Non-Casinos states that "... there are no minimum financial limits for controlling and reporting known or suspected money laundering or terrorist financing activity". By having high financial limits, operators run the risk of breaching the requirements of the LCCP, the Money Laundering, Terrorist Financing and Transfer of Funds (Payer Information) Regulations 2017(opens in a new tab), the Proceeds of Crime Act 2002(opens in a new tab), the Terrorism Act 2000(opens in a new tab) and the Gambling Act 2005(opens in a new tab). ML Triggers should be reviewed to ensure they are aligned with the licensee's specific business risks and fit for purpose, including rigorous checks on individuals at appropriate times.

Are there sufficient monitoring of table games and gaming machines to minimise the risk of ML, criminal living expenses, fraud and collusion?
Casinos face some enhanced legal liabilities under the Regulations (as they are part of the financially regulated sector). These include policies, procedures and controls which must be reported in detail:
Risk management practices
Internal controls

Customer due diligence (CDD) monitoring and continuous monitoring (including enhanced measures for high-risk customers

Reliability and record keeping

Case studies

Compliance monitoring and controls, and internal communications about these policies, procedures and controls.

For further information that casinos should include in their policies, procedures and controls, please see the Casino Guidelines.

Casinos must appoint a company member as a designated officer and a director (or equivalent) as compliance officer.
Regulation 21 requires casino operators to:

appoint a person who is a member of the board of directors (or, if there is no board, its equivalent governing body) or senior management as the person responsible for ensuring that relevant persons comply with this regulation;

establish an independent audit department responsible for reviewing and evaluating the appropriateness and effectiveness of the policies, controls and procedures adopted by the casino;
appoint a designated officer with the necessary skills, knowledge and expertise to perform that role.
The Anti-Money Laundering Guidance for Casinos and Non-Casinos states that "... there is no minimum financial limit for controlling and reporting known or suspected money laundering or terrorist financing activities". By having high financial limits, operators run the risk of breaching the requirements of the LCCP, the Money Laundering, Terrorist Financing and Transfer of Funds (Payer Information) Regulations 2017 (opens in a new tab), the Proceeds of Crime Act 2002 (opens in a new tab), the Terrorism Act 2000 (opens in a new tab) and the Gambling Act 2005 (opens in a new tab). ML triggers should be reviewed to ensure they are aligned with the licensee's specific business risks and are fit for purpose, including rigorous checks on individuals at appropriate times.
Are table games and gaming machines sufficiently monitored to minimise the risk of ML, criminal living spending, fraud and collusion?
Casinos face some enhanced legal liabilities under the Regulation (being part of the financial regulated sector). These include policies, procedures and controls which must be reported in detail:
Risk management practices

Internal controls

Customer due diligence (CDD) monitoring and continuous monitoring (including enhanced measures for high-risk customers

Reliability and record keeping
Compliance monitoring and controls, and internal communications about these policies, procedures and controls.
For further information which casinos should include in their policies, procedures and controls, please see the Casino Guidelines.
Casinos must appoint a company member as a designated officer and appoint a director (or equivalent) as compliance officer.
Rule 21 requires casino operators to:
Appoint a person who is a member of the board of directors (or, if there is no board, the equivalent governing body) or senior management as the person responsible for ensuring that relevant persons comply with these Rules.
Establish an independent audit department responsible for reviewing and evaluating the appropriateness and effectiveness of the policies, controls and procedures adopted by the casino.
Appoint a designated officer with the necessary skills, knowledge and expertise to fulfil that role.
Conducting screening of appointees by the person before and during their appointment.

Lessons learned

Informing the supervisory authority and subsequent appointments of the appointee.

When a designated employee receives a disclosure, the officer must consider it in the light of all relevant information available to the officer and determine whether it creates knowledge or suspicion, or reasonable grounds to have knowledge or suspicion, that the individual is involved in money laundering or terrorist financing.

Licence suspensions

Introduction

Given the significant challenges posed by the pandemic, it is not surprising that we have seen a significant increase in cases where gambling operators, particularly land-based operators, face extreme financial difficulties. In such circumstances, it is essential that operators and their representatives are aware of what is required in relation to the licensing objectives and customer protection. We urge licensees facing financial stability issues to cooperate with the Commission at an early stage.

Issues identified through casework

The messages in this chapter are not new, but it is important that operators communicate them fully when they find themselves in such a situation.

The Statement of Principles on Licensing and Regulation (June 2017) places the onus of compliance with regulations on the licensee at all times, whether it is the operator or the appointed manager. Social Responsibility Code 1. 1. 2 states:
The licensee is responsible for the actions of third parties who contribute to the provision of all aspects of the licensee's business related to the licensed activities.
We expect operators to:
Conduct their business with integrity.
Act with due care, skill and diligence.

Our requirements

Take care to organise and manage their operations responsibly and effectively, have adequate systems and controls in place to minimise risks to the licensing objectives.

Comply with the letter and spirit of the licence and the relevant rules of the Commission.

Disclose to the Commission what the Commission would reasonably expect.

Case studies

When planned profits are being made from the business, or when it becomes apparent to the operator that the long-term viability of the business is in jeopardy, operators and PML holders should be aware that our focus will be on ensuring that residents are treating consumers fairly.

To recognize the importance of notifying the committee before the scheduled date comes, and provide a plan to contact close people.

To understand the guidance that has determined our expectations for businesses that withdraw from the market.

Note that if Licensei does not provide nearby regularly, the committee has reserved the right to take measures against individual licensing to protect future consumers. The European Commission is likely to consider the adverse effects of Licensei when a person involved applies for a new sales license or applies for a personal license. In addition, information may be shared with other regulatory authorities.

As part of the central and high customer protection measures, Licensei, which separates customer funds, guarantees that bank accounts that own these funds are surrounded by ring fences and are not used to pay for operating expenses. Note that you have to do it.

The European Commission is increasingly regulating companies that have become trustworths. This is a difficult time for franchisie, but regulatory responsibilities remain the same for managers.

If the manager is officially appointed, its expectations will be inherited as the current License, and it must be fully aware of the legal obligations of the licensed gambling business and act quickly to comply. 。 If this is neglected, the committee may be taken and the activity may be suspended until the compliance is secured. The committee recognizes that this may have an economic impact on businesses, but if this measures are clearly necessary to ensure consumer protection, Take this measure.

Licence suspensions - Lessons learned

If you are appointed as a manager of the farm that has acquired the license, you will need to notify us if you have the intention of continuing the marketing of the business. At that time, it is necessary to specify who is responsible for supervising the business, and if these people do not have a personal license, or if they are not approved, individual management license (PML) You need to apply.

In addition, the following is required:
A copy of the trustee's report, and notification when the company is liquidated
Evidence of accounting records maintained by customer funds

Other related information to appropriately evaluate potential risks and consumer s-This information is a copy of the bank account statement of bank accounts that hold customer funds and to the trust. It may include detailed explanations of important financial transactions or other information that may be associated with evaluation.

If the company is under control and the transaction is continuing, the administrator will confirm that the business is complying with the 2005 gambling method (opened on a new tab) and the license conditions (LCCP). I have a responsibility.

The factors we consider when we look to end a suspension

Administrators pay attention to the following:

If Licensee negotiates about management, or if you have to have a personal license, you must apply for a personal license and hold it.
If the business is continuing, who is the individual license, or who is planning to be, if you have the intention to sell your business as an officially approved committee company, you will be candidate for the business. You should actively contact the committee to provide information about who you are. If the trustee does not access Eservices and does not do this through a key event, you need to do this via e-mail licensing@gamblingCommission. gov. uk.
Must be aware that licensing must continue to comply with all the legal requirements and LCCP requirements, or that there is a risk of suspension of license.

The European Commission has called for the appropriate systems and management to minimize the risks of license purposes, especially to operators, especially for operators. A competent person with sufficient and appropriate experience holding PMLS is seeking to supervise the daily management of the business.

Personal Licence reviews

Introduction

Business owners must prevent commercial consideration from hindering regulation responsibilities.

From 2020 to 2021, the European Commission has reviewed the procedures for compliance and enchanting. It has been revealed that businesses who do not comply with compliance have required further processes in order to increase the pace and raise the standards to satisfy the entire case of LCCP.
Until now, there were only advice such as warning, warning, screening, and suspension of license, and it was a useful means, but it did not necessarily lead to quick intervening and improvement.
In order to deal with this, Licensee promises to accept its own mistakes, reduce the risk of consumer damage, take relief measures in case necessary, and have no lon g-term compliance violation. Introduced a special measure process for the isolated situation that can be convinced.
Special measures are started by the European Commission and requires Licensei to meet the following requirements:
Licensei must be recognized and accepted.

Key issues identified through casework

Inadequate source of fund or source of wealth checks

The key person must attend a formal conference to explain why there is a default and what to do immediately to reduce the risk of consumer damage.

Record keeping

You must submit a formal action plan that detailed the improvement measures within 5 days. This plan must implement management measures to quickly reduce the risk of consumer damage.

Reporting criminal offences

The committee will judge the submitted action plan and decide whether it will be accepted. If some changes are needed to get the agreement on the amendment, an extension for a short period of time is permitted (within 2 days). Later, Licensei is required to follow the following requirements:

Nominated officer/ Money Laundering Reporting Officer (MLRO) poor practice

Weekly reports of the progress of the action plan and the deadline for the proposal.

Complete the action plan within 3 months.
Three months later, pass any of the compliance evaluation.
Calculate how much financial interests you have due to compliance violations and how to dispose of that amount.
Cases that are not suitable for specific measures are not included in this process, but are subject to a regular series of regulatory measures. If there is evidence that consumers may be exposed to serious harm, they will immediately consider suspension of license activities and judge that special measures are inappropriate.
Special measures have reached the threshold for the review of S116, but are very convinced that there is no continuous risk of consumer damage or limited, accepting disabilities early, and promptly disability. It is appropriate when the committee determines that there is a clear and aggressive commitment to improve. < SPAN> In order to deal with this, Licensei promises to accept its own failures, reduce the risk of consumer damage, take relief measures in case necessary, and have a lon g-term compliance violation. A special measure process has been introduced for an isolated situation that is convinced that there is no.

Senior management lacking oversight

Special measures are started by the European Commission and requires Licensei to meet the following requirements:

PML holder requirements

Licensei must be recognized and accepted.

The key person must attend a formal conference to explain why there is a default and what to do immediately to reduce the risk of consumer damage.
You must submit a formal action plan that detailed the improvement measures within 5 days. This plan must implement management measures to quickly reduce the risk of consumer damage.
The committee will judge the submitted action plan and decide whether it will be accepted. If some changes are needed to get the agreement on the amendment, an extension for a short period of time is permitted (within 2 days). Later, Licensei is required to follow the following requirements:
Weekly reports of the progress of the action plan and the deadline for the proposal.
Complete the action plan within 3 months.
Three months later, pass any of the compliance evaluation.
Calculate how much financial interests you have due to compliance violations and how to dispose of that amount.

Cases that are not suitable for specific measures are not included in this process, but are subject to a regular series of regulatory measures. If there is evidence that consumers may be exposed to serious harm, they will immediately consider suspension of license activities and judge that special measures are inappropriate.

Special measures have reached the threshold for the review of S116, but are very convinced that there is no continuous risk of consumer damage or limited, accepting disabilities early, and promptly disability. It is appropriate when the committee determines that there is a clear and aggressive commitment to improve. In order to deal with this, Licensee promises to accept its own mistakes, reduce the risk of consumer damage, take relief measures in case necessary, and have no lon g-term compliance violation. Introduced a special measure process for the isolated situation that can be convinced.
Special measures are started by the European Commission and requires Licensei to meet the following requirements:

Licensei must be recognized and accepted.

Nominated Officer role requirements

Reporting requirements

The key person must attend a formal conference to explain why there is a default and what to do immediately to reduce the risk of consumer damage.

You must submit a formal action plan that detailed the improvement measures within 5 days. This plan must implement management measures to quickly reduce the risk of consumer damage.

The committee will judge the submitted action plan and decide whether it will be accepted. If some changes are needed to get the agreement on the amendment, an extension for a short period of time is permitted (within 2 days). Later, Licensei is required to follow the following requirements:
Weekly reports of the progress of the action plan and the deadline for the proposal.
Complete the action plan within 3 months.

Three months later, pass any of the compliance evaluation.

Calculate how much financial interests you have due to compliance violations and how to dispose of that amount.
Cases that are not suitable for specific measures are not included in this process, but are subject to a regular series of regulatory measures. If there is evidence that consumers may be exposed to serious harm, they will immediately consider suspension of license activities and judge that special measures are inappropriate.
Special measures have reached the threshold for the review of S116, but are very convinced that there is no continuous risk of consumer damage or limited, accepting disabilities early, and promptly disability. It is appropriate when the committee determines that there is a clear and aggressive commitment to improve.
Compliance evaluation was pointed out at the ant i-money laundering (AML) policy and procedures, and the drawbacks of more secure gambling management. Franchisie has a qualification to take specific measures because the committee has been provided to the committee to accept its weaknesses and reduce potential risks, and to the committee has provided a high trust of the main person. It was judged to have.
As a result of consultation between the European Commission and Franchise, the following safe guards were implemented immediately due to the special circumstances of this failure:

Case studies

The operator must secure a question letter about the KYC (Know Your Customer) document and the source of wealth with a lifetime deposit of 250 pounds, and cannot accept further deposits until it is completed.

The deposit flag is reduced to 250 pounds within 24 hours

Licensee reports the progress of the action plan every week, and three months later, monitoring compliance evaluations, and that Licensee is currently complying with compliance, and the following protection measures are being implemented effectively. Reported to the meeting:

The upper limit of the deposit accepted in one transaction is £ 100.
If the deposit reaches £ 250, the deposit will be invalid, and you will need to provide salaries and occupations before playing more.
The upper limit of net loss is calculated based on the salary information provided by the customer, and this upper limit cannot exceed £ 400 every month.

When a satisfying fund source information is provided, the monthly net loss limit is set to up to 15%of customer net salaries.
More secure gambling exchanges are automatically triggered by various factors determined by algorithm software.
If a more secure gambling interaction is triggered, the deposit will be stopped until it is completed.

Licensee does not focus only on commercial interests, but to solve serious failures so that customer welfare is placed in the center of business and the control of the appropriate safe gambling and AML procedures are implemented. I worked on a rapid pace. The applied safeguard reflects the business risks and business risks specified by Franchisy, and is considered appropriate for the specific customer base. Franchiage actively cooperated with the European Commission, raised the standards, and provided substantial cooperation to protect the license purpose based on a specific risk profile on the customer.

There is another business as a further successful example of special measures:

PML holder health check

From the time of registration, a thre e-stage process has been introduced to judge the risk of accessible gambling.

Application of deposit blocks based on risks and customer loss levels (time and lifetime)
Added KYC (Know Your Customer) to the entire customer journey.
We reviewed customer risk indicators for both AML indicators and safe gambling indicators.
Improvement of customer screening by reviewing transaction history and risk indicators
Introduced live client monitoring and expanded personnel in this field
High risk account hardstop implementation
Invested in additional training for dedicated staff
Improvement of recording management on customer and business decisio n-making
Pilot schemes have been implemented since September 2020, and a total of eight businesses have introduced specific measures. The seven companies have only been confirmed three months later and have significantly improved. However, one company franchisie could not prove that sufficient compliance was being implemented. This franchise is currently subject to formal license reviews.
We have examined the impact of the special measures process and decided to do a trial basis until the spring of 2022. We are currently preparing to discuss the permanent implementation of the special measures process.

Illegal gambling

Introduction

This year, more number of licensing measures were implemented if regulatory activities were prolonged, and as a result, if it was necessary to reduce the risk of licensing purposes and secure appropriate consumer protection.

During this time, the European Commission did:

The License of the two online operators stopped and began screening, assuming that Gamstop's sel f-exclusion system was not completely integrated.

The license of the casino operator was suspended due to AML and more secure gambling failures.

Pause the license of Casino Opelator for not being "fair and open"

The activity may have been implemented against the 2005 gambling method (opened in the new tab) (law), and it may not be suitable for licensed activities. Pause the license.

As a result of concerns regarding conformity, the license of personal management licensee is suspended.

Issues identified and actioned

The European Commission is aware that pause can have a significant economic impact on business, and carefully examine if there is a way to secure compliance other than a pause.

The franchise member store calls for effect on the suspension of business by ensuring sufficient customer communication and signaling communication and not providing activities.

Once the business is suspended, the European Commission will see if the business suspension should come into effect, and what kind of activities should be allowed during the suspension of business (if it is allowed). You can decide. The European Commission is to cancel the suspension measures when we are convinced that Licensei has been involved in improvements to deal with our concerns and that the risk has been properly managed. do.

One Licensee had a management license to produce and provide gaming software, provide remote general betting products (live events), provide remote general betting (virtual events), and allow online casinos.	Historically, compliance issues have been pointed out, and further compliance evaluations were planned. The violation of license conditions and social liability norms was confirmed during the site review. The Licensei notified the committee that the evaluation will no longer cooperate before completing the evaluation by confirming the actual customer account, but will provide a record if there is a request.
The committee urged Licensei to review his position, but did not reach the agreement. The problem was taken up, and the license was suspended because the license purpose and the risks that consumers were unacceptable were unacceptable due to the continuous business based on compliance (compliance). Also, the committee refused to evaluate the licensed facility, and was questioned the aptitude of Licensh's license. As a result, the S116 license screening was started.	14
On the same day, the European Commission staff confirmed that the franchise website has a banner that seems to be neglecting the compliance issues proposed for license screening and suspension. The committee officials informed the franchise's law agent on the screenshot of the banner, emphasizing that the banner was questioning the aptitude as an operator license. The banner was later deleted. < SPAN> Franchise member stores call for effects effectively in the implementation of business suspension by ensuring sufficient customer communication and signaling communication and not providing activities.	13
Once the business is suspended, the European Commission will see if the business suspension should come into effect, and what kind of activities should be allowed during the suspension of business (if it is allowed). You can decide. The European Commission is to cancel the suspension measures when we are convinced that Licensei has been involved in improvements to deal with our concerns and that the risk has been properly managed. do.	10
One Licensee had a management license to produce and provide gaming software, provide remote general betting products (live events), provide remote general betting (virtual events), and allow online casinos.	7
Historically, compliance issues have been pointed out, and further compliance evaluations were planned. The violation of license conditions and social liability norms was confirmed during the site review. The Licensei notified the committee that the evaluation will no longer cooperate before completing the evaluation by confirming the actual customer account, but will provide a record if there is a request.	3

Other action

The committee urged Licensei to review his position, but did not reach the agreement. The problem was taken up, and the license was suspended because the license purpose and the risks that consumers were unacceptable were unacceptable due to the continuous business based on compliance (compliance). Also, the committee refused to evaluate the licensed facility, and was questioned the aptitude of Licensh's license. As a result, the S116 license screening was started.

On the same day, the European Commission staff confirmed that the franchise website has a banner that seems to be neglecting the compliance issues proposed for license screening and suspension. The committee officials informed the franchise's law agent on the screenshot of the banner, emphasizing that the banner was questioning the aptitude as an operator license. The banner was later deleted. The franchise member store calls for effect on the implementation of business suspension by ensuring sufficient customer communication and signaling communication and not providing activities.

Consumer guidance on unlicensed websites

One Licensee had a management license to produce and provide gaming software, provide remote general betting products (live events), provide remote general betting (virtual events), and allow online casinos.

Historically, compliance issues have been pointed out, and further compliance evaluations were planned. The violation of license conditions and social liability norms was confirmed during the site review. The Licensei notified the committee that the evaluation will no longer cooperate before completing the evaluation by confirming the actual customer account, but will provide a record if there is a request.

The committee urged License to review his position, but did not reach the agreement. The problem was taken up, and the license was suspended because the license purpose and the risks that consumers were unacceptable were unacceptable due to the continuous business based on compliance (compliance). Also, the committee refused to evaluate the licensed facility, and was questioned the aptitude of Licensh's license. As a result, the S116 license screening was started.

Illegal lotteries on social media

The licensee appealed the suspension, arguing that it had not conducted its licensed activities in a manner contrary to the purpose or conditions of its license and that the only reason the Commission suspended its license was due to suitability (Article 120 (Article 120(1)(d)). Specifically, it argued that its license was suspended because the licensee would not consent to participating in Skype calls.

The Third Chamber considered this appeal and ruled in Article 120 The judge upheld the panel, concluding that the license should be suspended because there were grounds for suspecting that one of the conditions of section (1) may apply, that the licensee had breached several conditions of the licence, that the breaches were serious enough to justify suspension, and that the failure to attend the compliance review aggravated those breaches. The judge further commented that there was nothing to indicate that the Commission's original decision was unjustified.

The findings also confirmed that the Commission has the power to require franchisees to attend remote compliance reviews. It also confirmed that the Commission can ask franchisees to produce records and documents in its assessments and can inspect customer and audit records. Following this decision, the trade licence was revoked and two sole proprietorship licences were also revoked.

Where there is a risk to the licence purpose, the Commission may consider whether it is appropriate to suspend the licence. The Commission may do so if it is satisfied that:	There is a breach of the conditions of the licence (section 120(1)(b) of the Act)	The licensee is not unfit to carry out the authorised activity (section 120(1)(b) of the Act) S120 (1) (d)
The permitted activities are or have been carried on in a manner inconsistent with the purpose of the license (S120 (1) (a) of the Act)	664	65	729
If a suspension is granted, the Commission may determine whether the suspension should take effect immediately and what activities, if any, should be permitted during the suspension.	27	20	47
Within 14 days of the suspension of the license, Licensee has the right to request the regulated panel to review the suspension decision. The panel makes a decision based on the facts that can be obtained at the time of the hearing, and its decision may be the presence or absence of suspension, the validity period of the suspension, and what activities may be continued. Give priority to the initial panel decision. In addition, Licensei can also ask for the decision of the court.	0	1	1
While the qualifications are suspended, the committee regularly reviews the situation to confirm that it is appropriate to continue the suspension of qualifications. License is always notified of measures to be taken to make the pause appropriate. The elements that the committee pays considerable attention is as follows:	5	18	23
Customer protection	6	12	18
Effective ris k-based management	0	2	2
Appropriate rules for more secure gambling	0	1	1
The European Commission recommends all licensed to protect the purpose of consumer and licensing, and to continue the suspension in the appropriate cases.	2	0	2
The licensee is not unfit to carry out the authorised activity (section 120(1)(b) of the Act) S120 (1) (d)	704	119	823

10 cases canceled-8 personal sales licenses (PFL), personal management license (PML) 2

Issues identified and actioned

11 warnings for PMLS

1 warning with conditions for PML license

21 action recommendations for PMLS

10 PML issuance

This year's case, this year, there was evidence that PML holders did not maintain the appropriate supervision, and that they did not have enough curiosity about the funding source and the source of wealth used for customer play.

Consumer guidance

There are sufficient documents and audit trails that provide PML holders in the obligation to prevent money laundering (AML) and terrorist funding (CTF) after obtaining sufficient information and making appropriate decisions. A missing case was repeated.

In the 2005 Gambling method (opened on a new tab), the schedule 7 reports as a serious incident have been delayed and default.

Elim Poon - Journalist, Creative Writer

Last modified: 27.08.2024

Furthermore, the Raising Standards for consumers – Compliance and Enforcement report to states: Our requirements. The process of special measures. Raising Standards for consumers - Compliance and Enforcement report to The Gambling Commission's report on Compliance and Enforcement. the Energy Consumer Protection Act, (ECPA); the Ontario Rebate for Electricity Consumers Act, ; the regulations made under those statutes; certain.

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