Greentube Alderney Limited Public Statement
Our public statements make reference to breaches of the Licence Conditions and Codes of Practice (LCCP) requirements which were in effect at the time of the breach. In some cases, the requirements have since been updated.
Operators are expected to consider the issues outlined below and review their own practices to identify and implement improvements in respect of the management of customers’ accounts.
Introduction
Licensed gambling operators have a legal duty to ensure their gambling facilities are provided in compliance with the Gambling Act 2005 (opens in new tab)(the Act), the conditions of their licence and in accordance with the licensing objectives, which are to:
- prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime
- ensure that gambling is conducted in a fair, safe and open way
- protect children and other vulnerable people from being harmed or exploited by gambling.
Operators are expected to consider the issues outlined below and review their own practices to identify and implement improvements in respect of the management of customers’ accounts.
Greentube Alderney Limited Executive Summary
A section 116 (of the Act) regulatory review was commenced following a Compliance Assessment of the remote Operating Licence of Greentube Alderney Limited (licence number 039050 – R – 319315-018).
The review found failings in Greentube Alderney Limited’s Anti-Money Laundering / Counter Terrorism Financing (AML/CTF) and Social Responsibility (SR) controls.
Greentube Alderney Limited failed to comply with the following requirement of the Licence Conditions and Codes of Practice (LCCP) between September 2022 and June 2023:
- paragraph 3 of Licence Condition (LC) 12.1.1 which requires licensees to ensure that Money Laundering (ML) 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.
Greentube Alderney Limited failed to comply with the following requirement of the Licence Conditions and Codes of Practice (LCCP) between December 2022 and June 2023:
- paragraphs 1 and 8 of Social Responsibility Code Provision (SRCP) 3.4.3 relating to remote customer interaction.
In line with our Statement of principles for licensing and regulation, Greentube Alderney Limited will make a payment in lieu of a financial penalty of £1,000,000. Details of this are set out under the heading Regulatory Settlement.
Greentube Alderney Limited Findings
A Commission compliance assessment and subsequent regulatory review found:
Breach of Paragraph 3 of Licence Condition 12.1.1
LCCP 12.1.1(3) requires:
"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."
We found that, on occasion, Greentube Alderney Limited did not ensure that its policies, procedures and controls were effectively implemented.
Specifically, Greentube Alderney Limited did not always:
scrutinise available information upon receipt, or in a timely manner, leading to an avoidable delay in the identification and potential escalation of money laundering/terrorist financing risk(s). For example, after registering an online account, a customer provided a bank statement as proof of address. The bank statement showed complex and unusual transactions, including over £100,000 being transferred in and out of the account (in multiple transactions), and a negative closing balance. It was only when the ML risk increased, as the customer’s spend reached a designated threshold four months later, that the bank statement was scrutinised, and the matter escalated to the Money Laundering Reporting Officer (MLRO) in accordance with its policy.
fully investigate and escalate accounts showing apparent links to other accounts in a timely manner. Greentube Alderney Limited’s policy does not permit duplicate accounts. Whilst some of its controls were effective Officials saw examples where pertinent information regarding potential links between accounts was received by the Licensee but not fully considered and acted upon, until a financial trigger had been reached. This led to an avoidable delay in investigation, escalation and actions taken to mitigate potential ML/TF risks of accounts being potentially funded or controlled by a different account holder. Officials saw one example where potential links (address and surname) to an individual with previous convictions for the supply of class A drugs were not fully considered and escalated in a timely manner.
follow its policy regarding what it refers to as “risky occupations”. Although its controls considered risks posed by the industry in which the customer is employed, there were certain circumstances which resulted in insufficient consideration being given to the risk posed by persons who had access to third-party funds which could have been misappropriated and used to fund the person’s gambling. For example, in one case the potential increased risk posed by a ‘finance manager’ was not recognised or built into the customer’s risk profile, and no steps were taken to mitigate the increased risk.
follow its recycled winnings policy. Greentube Alderney’s policy specified a time period for accepting ‘recycled winnings’ (winnings which have been withdrawn and redeposited) after which the customer’s source of funds would be requested. This is to mitigate the potential ML/TF risks associated with money subsequently deposited being from a different source to that previously won and withdrawn. However, the operator did not always follow that policy. In one example, following a large win and withdrawal, a customer was allowed to continue depositing funds from different payment methods long after the specified time period without the operator requesting source of funds information. In total over £70,000 was deposited without the customer being asked to evidence their source of funds.
The Commission’s review of the specific customers identified during the compliance assessment found no evidence of money laundering or criminal spend with the Licensee.
Failure to comply with paragraphs 1 and 8 of SRCP 3.4.3
Compliance with a SRCP is a condition of the licence by virtue of section 82(1) of the Act.
SRCP 3.4.3 paragraph 1 requires:
"Licensees must implement effective customer interaction systems and processes in a way which minimises the risk of customers experiencing harms associated with gambling. These systems and processes must embed the three elements of customer interaction – identify, act and evaluate – and which reflect that customer interaction is an ongoing process as explained in the Commission’s guidance (see paragraph 2)."
We found that on occasion Greentube Alderney Limited had not ensured that its policies, procedures and controls had been effectively implemented.
Specifically, Greentube Alderney Limited:
failed to fully and effectively implement its policy regarding big/high winners.
The operator had a policy aimed at ensuring customer limits are based on regular, sustainable income - as opposed to one-off or irregular forms of income. The Commission saw one customer example where, following a withdrawal of significant winnings, a customer was permitted to deposit significant sums for a period greatly in excess to that specified in its policy. The deposits were made without any evidence being provided by the customer confirming the source of the further deposits were the original withdrawn winnings.did not always fully and effectively implement its processes regarding the legitimacy of documents. Despite its agents receiving training on fraudulent documents, it was found that agents did not always apply their training.
did not fully and effectively implement its controls to identify indicators of vulnerability/potential harm in a timely manner.
Officials saw examples where documentation provided by customers – which indicated potential financial vulnerability – was either not reviewed at all or was not reviewed or escalated until a financial trigger was hit or a concerning comment made. As a result, customers were allowed to deposit at higher limits despite Greentube Alderney Limited being in possession of documentation showing issues such as low account balances, overdrafts, transactions to other gambling operators, deposits disproportionate to salary, and social/housing benefits. For example, one customer supplied a bank statement (as proof of address) that had a negative opening and closing balance and included numerous transactions to another gambling operator. There was no evidence that the bank statement had been considered, and the potential vulnerabilities identified from a social responsibility perspective, four months later when the account was blocked for AML reasons. Over £4,000 had been deposited during this period.
SRCP 3.4.3 paragraph 8 requires:
"Licensees must take appropriate action in a timely manner when they have identified the risk of harm."
We found that, on occasion, Greentube Alderney Limited did not always take appropriate action in a timely manner when the risk of harm was identified.
In some accounts reviewed, although risk indicators/markers of harm were present in a customer’s journey and a phone interaction was deemed appropriate, the calls were not performed promptly, rather they were postponed whilst further monitoring took place and/or until a further/higher trigger had been hit or other behaviour prompted it.
Greentube Alderney Limited Regulatory Settlement
This regulatory settlement consists of:
- a payment of £1,000,000 in lieu of a financial penalty, this includes a divestment of £22,113. The money will be directed to socially responsible purposes
- agreement to the publication of a statement of facts in relation to this case
- payment towards the Commission’s costs of investigating the case.
In considering an appropriate resolution to this investigation, the Commission has had regard to the following aggravating and mitigating factors:
Aggravating factors
- the failings were serious and potentially impacted on the licensing objectives
- in 2021 the Commission accepted a regulatory settlement from Greentube Alderney Limited for historical failings in relation to AML/CTF and SR controls
- the breach arose in circumstances that were similar to previous cases the Commission has dealt with which resulted in the publication of lessons learned for the wider industry.
Mitigating factors
Greentube Alderney Limited:
- swiftly put in place an action plan designed to remedy the failings and provided updates
- fully co-operated with the investigation and provided information by agreed deadlines
- accepted the failings at an appropriately early stage in the investigation.
Good practice
Gambling operators should take account of the failings identified in this investigation to ensure industry learning. Operators should consider the following questions and take remedial action where required:
- do you have effective processes in place to test and assess whether your policies, procedures and controls are being effectively implemented by staff? Is this recorded and demonstrable?
- do you have set turnaround times for manual reviews, actions, processes, etc? Are these routinely met?
- have staff received adequate initial and refresher training? Is this recorded and demonstrable?
- do you have an effective method to disseminate feedback, good practice and lessons learned to your staff?
- do you fully consider the risks associated with customers who may have access to third-party funds which could be misappropriated?
- do you fully investigate accounts and mitigate risks when links are identified?
- are you fully scrutinising all customer information available to you in a timely manner, properly assessing and taking steps to mitigating potential ML/TF and SR risks?
- do you have a good system for cross-departmental sharing of information and concerns? For example, would your Fraud/AML agents alert your social responsibility agents if a bank statement showing financial vulnerability was received?
- do you act quickly enough when customers display potential markers of harm? Do your procedures specify appropriate timescales for actions and interactions?
- if you deviate from your policies and procedures, are you able to justify this and do you fully document those decisions and the rationale?