Mr Green Limited Findings

The investigation and our subsequent regulatory review found:

failings in the Licensee’s implementation of Anti-Money Laundering (AML) policies, procedures and controls
deficiencies in its responsible gambling policies, procedures, controls and practices, including weaknesses in implementation
certain customers who were the subject of AML restrictions on different brands were able to open account(s) with MRG.

We found that between 20 September 2020 and 22 October 2021 MRG had been in:

Breach of paragraph 1 of licence condition 12.1.1

Licence condition 12.1.1(1) states: “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, including the introduction of new products or technology, new methods of payment by customers, changes in the customer demographic or any other material changes, and in any event reviewed at least annually.”

The Licensee accepted it breached this licence condition as its ML/TF risk assessment did not sufficiently reflect the Commission’s expectations or fully take into account the Commission’s ML/TF risk assessment of the British gambling industry.

The failings were that the Licensee’s risk assessment did not:

make explicit reference to specific risks in relation to TF
make specific reference to high monetary thresholds or organised crime gangs use of mule accounts⁴.

We found that between May 2020 and 18 October 2021 MRG had been in:

Breach of paragraphs 2 and 3 of licence condition 12.1.1

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.”

Licence condition 12.1.1(3) states “Licensees must ensure that such policies, procedures and controls are implemented effectively, kept under review, revised appropriately to ensure that they remain effective, and take into account any applicable learning or guidelines published by the Gambling Commission from time to time.”

MRG accepted it breached this licence condition as:

there were weaknesses and shortcomings in relation to the adequacy and maintenance of its policies and procedures, and their implementation
its policies, procedures and controls lacked guidance on appropriate action to take following the results of customer profiling and how its findings should be used to establish the appropriate outcome
its procedures and controls lacked hard stops to prevent further spend and mitigate against ML risks before customer risk profiling is completed
certain customers were able to deposit large amounts of money without timely Enhanced Customer Due Diligence (ECDD) - a particular example included Customer A who deposited £52,985 before ECDD profiling.
a failure to resource due diligence teams sufficiently following a change in triggers resulted in a backlog of ECDD reviews to complete
it made assumptions that the fact certain customers were in a winning position reduced the risk for ML without gathering supporting evidence to support that assertion. In addition, for certain customers, the Licensee could not demonstrate it held adequate evidence or could not point to recorded decisions that allowed it to assert a customer’s recycling of winnings reduced the ML risk posed to the business
it placed an undue reliance on open-source information and should have taken further steps to corroborate the customer’s Source of Funds (SoF) information
AML staff training provided insufficient information on risks and how to manage them, in particular risks such as those associated with politically exposed person’s and high-risk jurisdictions
the Commission identified that certain customers were able to deposit large amounts of money without the Licensee conducting appropriate know your customer checks
- With Customer B, who deposited £73,535 and lost £14,068 in four months, the Licensee focused on the net worth of the companies with which the customer identified as being a director, rather than establishing personal income derived through a salary or dividend payments.

Breach of Paragraph 1 of licence condition 12.1.2 (Anti-money laundering measures for operators based in foreign jurisdictions)

Paragraph 1 of this condition 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”.

The Licensee accepts it breached this licence condition as the AML failings, set out above, constitute a breach of the 2017 Money Laundering Regulations, namely:

regulation 18 requires that the ‘relevant person’ take appropriate steps to identify and access the risks of ML and TF to which its business is subject
regulation 19 (1)(a) requires that the ‘relevant person’ must maintain policies, controls and procedures to mitigate and manage effectively the risks of ML and TF identified in any risk assessment undertaken by the relevant person
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 ECDD measures and enhanced ongoing monitoring in any case identified as one where there is a high risk of ML or TF.

The Commission’s review of the specific customers identified during the compliance assessment found no evidence of criminal spend with the Licensee.

Failure to comply with Paragraph 1 and 2 of SRCP 3.4.1 (Customer Interaction)

Compliance with a SRCP is a condition of the licence by virtue of section 82(1) of the Act. SRCP 3.4.1 (amended from 31 October 2019) states:

“1 Licensees must interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This must include:

a. identifying customers who may be at risk of or experiencing harms associated with gambling
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.

2 Licensees must take into account the Commission’s guidance on customer interaction.”

MRG accepted it was not fully in compliance with SRCP 3.4.1 as:

it failed to identify certain customers at risk of experiencing gambling related harm and checks should have been undertaken at a significantly earlier stage in the customer's journey:

customer C opened an account on 3 January 2021 and had deposited £23,000 in 24 hours because was no trigger in place to capture and prevent high velocity gambling without any interaction taking place
customer D opened an account on 16 March 2021 and lost £14,902 in 70 minutes, illustrating there was no effective trigger in place to capture and prevent high velocity gambling without any interaction

due to poor systems, and a lack of oversight across brands, there was no complete picture of a customer’s activity available to staff in order to identify risk from previous interactions or safeguards put in place
inadequate record keeping hampered the operator’s ability to decide how and when to interact with customers
it had insufficient controls in place to protect new customers, and to effectively consider high velocity spend and duration of play until the customer may have been exposed to the risk of substantial losses in a short period of time:
- customer E was allowed to open a new account and spend £32,500 over two days in January 2021 without any checks
- customer F was allowed to open a new account and spend £19,000 in 33 days over February and March in 2021 without any checks
- customer C was allowed to open a new account and spend £23,000 in 20 minutes on 3 January 2021 without any checks
- customer D was allowed to open an account and spend £18,000 in 24 hours on 3 January 2021 without any checks
there was a reliance from Licensee on email interactions when customers hit safer gambling alerts. Whilst the emails were not automated, they were not sufficiently tailored to customers’ individual circumstances.

Failure to comply with paragraph 1 and 2b of SRCP 3.9.1 (Identification of individual customers)

Paragraph 1 of SRCP 3.9.1 states:

“Licensees must have and put into effect policies and procedures designed to identify separate accounts which are held by the same individual”.

Paragraph 2b states:

“Where licensees allow customers to hold more than one account with them, the licensee must have and put into effect procedures which enable them to relate each of a customer’s such accounts to each of the others and ensure that: all of a customer’s accounts are monitored and decisions that trigger customer interaction are based on the observed behaviour and transactions across all the accounts”.

MRG accepted it was not fully in compliance with SRCP 3.9.1 as:

the Commission review revealed the Licensee failed to establish that at least four consumers had, or previously had, accounts, with WHG earlier enough in the customer journey. The linked accounts were discovered by MRG at the point it completed ECDD by which point significant amounts had been staked.

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Last updated: 28 March 2023

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