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Failure to identify problem gambling behaviour

Social responsibility (SR) code provision 3.4.1(1)

Which states that “Licensees must put into effect policies and procedures for customer interaction where they have concerns that a customer’s behaviour may indicate problem gambling. The Policies must include:

(e) specific provision for making use of all relevant sources of information to ensure effective decision making and to guide and deliver effective customer interaction including in particular:

  • provision to identify at risk customers who may not be displaying obvious signs of, or overt behaviour associated with, problem gambling; this should be by reference to indicators such as time or money spent.
  • specific provision in relation to customer designated by the Licensee as ‘high value’, ‘VIP’ or equivalent.
  • specific provision for interacting with customers demonstrating signs of agitation, distress, intimidation, aggression or other behaviours that may inhibit customer interaction.”

Operators should also keep a record of customer interactions, and where an interaction has been ruled out.

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 Licensee had also failed to take into account the Commissions guidance regarding responsible gambling and affordability. This led to BGO not always identifying and interacting with customers who were displaying signs of problem gambling and, even when the customer interaction process was triggered, there was a failure to follow up with an interaction.

Examples of the social responsibility failings include:

  • Customer A this customer won a substantial amount on the on the National Lottery. In the following three months the customer lost in the region of £159,000 and activated a considerable number of RG triggers. On reviewing the account, it revealed that customer interactions consisted of thirty pop up questionnaires which had been sent out whilst only three RG interactions were made.

The customer was not asked if they were in control of their gambling with a general presumption recorded that the customer was able to afford to gamble due to the lottery win. The Commission finds this wholly unacceptable. The Licensee accepted that the customer had hit a significant number of RG triggers and that there was an overuse of pop ups.

  • Customer B’s account was opened in April 2017 and initially the customer was depositing relatively low amounts. Between 6 December and 24 December 2018 the customer deposited a total of £106,800 on 2 occasions in excess of £20,000 in a day.

During this period, the customer received 23 pop ups, all of which were answered by the customer. On 10 December 2018 the customer deposited 13 times between 12am and 1am totalling £6,500. The Licensee’s RG policy at this time (November 2018) stated that this would activate a trigger for the account to be flagged for review and a deposit freeze to be applied. However, the Licensee acknowledged that between the hours of 1am and 7am there was no RG team in place. Officials noted that the Licensee failed to speak with the customer the following day as required by their policy and instead sent an email. The Licensee agreed there was an over- reliance on popups with this account.

Failure to have in place appropriate AML controls

Licence condition 12.1.1 relates to the Prevention of Money Laundering and Terrorist Financing

Licence condition 12.1.1(1) requires:

Licensees must conduct an assessment of the risks of their business being used for money laundering and terrorist financing. Such risk assessment must be appropriate and must be reviewed as necessary in the light of any changes of circumstances

BGO accepts it failed to conduct a risk assessment of the risks of the business being used for money laundering and terrorist financing from September 2018 – July 2020 in accordance with licence condition 12.1.1(1). It also breached licence conditions

12.1.1(2) and 12.1.1(3) by failing to ensure adequate customer Enhanced Due Diligence (EDD) and Source of Funds (SOF) checks had been conducted on customers who presented a higher risk of money laundering.

During our investigations, we identified customers who were able to gamble significant sums of money without adequate EDD and SOF checks being conducted.

The Commission examined the following customer accounts:

In the case of the following customer the licensee did not effectively implement its own policies and procedures.

Customer C the Commission found insufficient evidence had been provided in respect of SOF or SOW. The Licensee accepted that its AML policies and procedures had not reflected current practices and were inadequate in respect of this customer. It could not offer an explanation as to why this customer account was allowed to pass ECDD and this was unacceptable.

In mitigation the Licensee believed there was an error as a result of historic preloaded existing accounts which had been put onto their own internal system.

Licence condition attached to the operating licence in October 2014 (valid from 1 November 2014), superseded by licence condition 12.1.2

The condition attached in October 2014 and licence condition 12.1.2(1) requires:

Licensees to put into place and implement the measures described in Parts 2 and 3 of the Money Laundering Regulations 2007 (superseded by the 2017 Regulations), insofar as they relate to casinos.

BGO accepted that between 25 September 2018 and 21 January 2020 it failed to put in place and implement measures described in the Money Laundering Regulations 2007 and of the Money Laundering Regulations 2017. This was because, between the relevant period, BGO did not have adequate AML controls to consistently address the risks presented by higher risk customers.

An example of the failings identified was found in the customer account of Customer D. This customer deposited in excess of £100,000 and lost more than £65,000 in seven days. It was known that the customer had a salaried income of less than £20,000 but the customer had not provided appropriate SOF or SOW checks.

The Licensee accepted from the customer a screenshot of a current bank account, which was contrary to its policies. The screenshot detailed three transactions of monies which was believed to have come from an online gambling company together with a screenshot showing savings. Neither the source of the monies from the gambling company or the source of the funds from the savings account was established nor challenged by the Licensee.

The Licensee was also aware from checks that this customer had entered into an Individual Voluntary Arrangement (IVA) four months previously but were not aware of the circumstances regarding the IVA. The Licensee did not establish the SOF for this customer, breaching Regulation 28(11)(a) of the 2017 Regulations.

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