Hillside (UK Gaming) ENC Findings
The investigation and our subsequent regulatory review found the Licensee had:
Breached paragraph 2 of licence condition 12.1.1 (Prevention of money laundering and terrorist financing) between May 2021 and July 2022
Licence condition 12.1.1(2) states: “Following completion of and having regard to the risk assessment, and any review of the assessment, licensees must ensure they have appropriate policies, procedures and controls to prevent money laundering and terrorist financing.”
The Licensee accepted that, at the time of the assessment:
- the enhanced customer due diligence triggers in place were ineffective at managing ML risk
- it failed to undertake financial sanctions checks on new customers prior to their first deposits
- it failed to undertake independent verification checks and over relied on customers’ annual self-verification of customer due diligence information, such as identification documents
- its procedure document contained inadequate detail as to who would be deemed “at risk” and “not at risk” for customer risk profiling.
The Commission’s review of the specific customers identified during the compliance assessment found no evidence of criminal spend with the Licensee or the acceptance of funds from persons subject to financial sanctions.
Breached licence condition 12.1.2 (Anti-Money Laundering - Measures for operators based in foreign jurisdictions) between May 2021 and July 2022
Licence condition 12.1.2 has been in place since October 2016 and requires that: “Licensees must comply with Parts 2 and 3 of the Money Laundering Regulations 2007 (UK Statutory Instrument No. 2157 of 2007) as amended by the Money Laundering (Amendment) Regulations 2007 (UK Statutory Instrument No. 3299 of 2007), or the equivalent requirements of any UK Statutory Instrument by which those regulations are amended or superseded insofar as they relate to casinos (the MLR) whether or not the MLR otherwise apply to their business”.
Hillside (UK Gaming) ENC accepted it breached this licence condition as the AML failings, set out above, constitute a breach of the 2017 Regulations, namely:
- Regulation 28(11)(a) requires ongoing monitoring of a business relationship which includes, where necessary, checking source of funds to ensure that the transactions are consistent with the relevant person’s knowledge of the customer, the customer’s business and risk profile
- Regulation 33 imposes an obligation to apply enhanced customer due diligence measures and enhanced ongoing monitoring in any case identified as one where there is a high risk of ML or TF.
Failed to comply with paragraphs 1b and 1c of SRCP 3.4.1 (Customer Interaction) between October 2021 to September 2022
Compliance with a SRCP is a condition of the licence by virtue of section 82(1) of the Act. SRCP 3.4.1 (in force from 31 October 2019 until 11 September 2022) states:
“1. Licensees must interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This must include:
- b. interacting with customers who may be at risk of or experiencing harms associated with gambling.
- c. understanding the impact of the interaction on the customer, and the effectiveness of the Licensee’s actions and approach”.
The Licensee accepted that at the time of the assessment:
- interactions were frequently not tailored to the specific customer journey or spectrum of harm and therefore interactions were not meaningful
- its Early Risk Detection System was not demonstrably effective in understanding the impact of individual interactions on a customer’s behaviour and whether further action was required
- its approach to evaluation meant that it was unable to effectively ascertain whether a customer had read and understood the information or advice provided within its interactions.
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Hillside (UK Gaming) ENC Regulatory Settlement
Last updated: 4 April 2024
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