Triplebet Limited trading as Matchbook Public statement
Triplebet operated a betting exchange and a remote casino trading as Matchbook under an operating licence granted by the Gambling Commission.
Following a licence review, which commenced on 13 August 2018, the matter was referred to the Commission’s Regulatory Panel. The Panel met on 17 February 2020 and decided to:
- suspend the operating licence
- impose further conditions on the licence
- impose a financial penalty of £739,099.
The reasons for the Panel's decision were that Triplebet had:
- breached conditions of its licence relating to anti-money laundering measures;
- failed to comply with the Commission's social responsibility codes of practice, and
- operated in a manner inconsistent with the statutory licensing objectives to keep crime out of gambling and to protect children and other vulnerable people from harm.
- In line with our Statement of principles for licensing and regulation and our Licensing, compliance and enforcement under the Gambling Act 2005: policy statement the Commission has decided to publish the Panel’s findings, as we consider that there are wider lessons to be learnt by the industry in general about the failings we identified.
Triplebet Limited Executive summary
Anti-money laundering failings
The Panel identified deficiencies in:
- Triplebet's anti-money laundering policies
- the implementation of such policies
- its monitoring of business relationships
- its approach to account to account transfers, and in its due diligence regarding members of gambling syndicates.
Triplebet's licence and the Money Laundering Regulations 2017 require operators to establish and maintain policies to manage effectively the risks of money laundering and terrorist financing. The Panel found that Triplebet's anti-money laundering policies were deficient as they failed:
- to set out the objective circumstances which would trigger a risk reclassification for customers
- to set out the specific enhanced due diligence measures which would be implemented for particular categories of high risk customer
- to provide guidelines for when source of funds and/or source of wealth investigations should be undertaken
- to require customer interactions and monitoring to be adequately recorded.
Implementation of policies
- Triplebet's licence and the Money Laundering Regulations 2017 required its anti-money laundering policies, procedures and controls to be implemented effectively, kept under review and revised appropriately.
- Triplebet failed to update its anti-money laundering policy between November 2014 and October 2017. It also failed to ensure that its policies, procedures and controls were being implemented effectively. Although it claimed that it had relied on staff to ensure that its policies and procedures were being implemented effectively, it had failed to give its staff sufficient guidance on implementation or to monitor or manage them sufficiently.
Monitoring of business relationships
Triplebet's licence and the Money Laundering Regulations 2017 required ongoing monitoring of business relationships, including, where necessary, the customer's source of funds.
The Panel found that Triplebet did not conduct appropriate ongoing monitoring of business relationships in several respects, including the following:
- monitoring did not place sufficient emphasis on addressing anti-money laundering risks
- there was insufficient recording of outcomes of monitoring
- monitoring did not always result in appropriate steps being taken in accordance with Triplebet's procedures, which resulted in too little emphasis on obtaining documentary evidence, including evidence relating to source of funds.
In several cases, customers had been permitted to gamble very large sums without any checks of their source of funds or source of wealth. In one case, a customer put at risk over £2 million in a single day without any source of funds or source of wealth being required. In another, a customer deposited and shortly afterwards withdrew a large sum of money without any gambling activity, a risk factor for money laundering, yet Triplebet had carried out no checks on the customer other than to verify his identity and address one year earlier.
Triplebet was unable to produce documentation demonstrating ongoing monitoring in a number of cases in which players were gambling large sums of money.
In the case of its top ten customers gambling on the betting exchange:
- checks were confined to basic checks of identity and address checks
- no risk profiles had been prepared
- the customers' source of funds had not been checked
- there was a general failure to record monitoring
- there was no record of meetings or interactions
- there were no records of conference minutes or records of any assessments as a result of meeting those customers.
In one case, Triplebet had failed to conduct any enhanced due diligence or source of funds checks on a customer who had lost $714,000 over a year, before the Gambling Commission raised concerns about tainted funds linked to a family member who had been convicted of gambling-related offences.
Triplebet submitted that some or all of the players were professional gamblers who are a known low risk category for money laundering. However, it was unable to adduce detailed documentary evidence to support its understanding of the customers in question as professional gamblers. In any event, the Panel rejected the submission that professional gamblers are a known low risk category for money laundering, since money laundering includes the simple use of criminal funds to fund gambling as a leisure activity, and criminals may also be habitual gamblers.
Account to account transactions
Triplebet had permitted account to account transactions, whereby one customer can move money to another customer or account, or even another account in his/her name, including abroad, without the kind of controls which would attach to banking transactions for similar amounts and creating an appearance of legitimate monies to be withdrawn or spent.
The Panel found that such transactions are an obvious risk for money laundering. However:
- prior to October 2017, account to account transfers were not documented at all
- transfer request documents post-October 2017 failed to record the reason for the transfers
- there were instances of customers transferring monies after depositing them with little or no play
Triplebet had not always applied its own rule that those receiving transfers must roll them over in the Exchange before withdrawing them;
- there were examples of single customers being listed against different countries and/or making transfers between accounts in their own name
- between November 2014 and May 2018, approximately £3.2 million and $2.4 million was transferred from GB customers to non-GB customers, with £1.1 million and $1.8 million passing in the other direction
Triplebet could produce no record of requests to make account to account transfers being refused.
Following the intervention of the Gambling Commission, Triplebet ceased to permit account to account transactions for its UK customers in May 2018. It did not finally ban such transactions for non-UK customers until January 2019.
One of Triplebet's main customers was a syndicate, whose lead contributor was a professional gambler, who also held a beneficial interest in Triplebet itself.
Over an 18-month period from November 2016, the syndicate matched bets on the Exchange totalling in excess of $55 million, without any documented risk assessment.
Triplebet submitted that its actual customer was the lead contributor of the syndicate and that therefore there was no obligation upon it to ascertain the identities of the other contributors or consider their source of funds or source of wealth. The Panel found that the consequence was that gamblers had been permitted to gamble very large sums without due diligence.
By the date of the hearing, Triplebet had suspended activity for all syndicates pending the carrying out of due diligence on their contributors in line with a policy which remained to be developed.
The Panel rejected a number of general arguments advanced by Triplebet, including the following:
- Triplebet argued that as the review had uncovered no evidence of money laundering, the Panel should conclude that its business model presented no substantial risk of money laundering. The Panel held that the requirements of the Money Laundering Regulations and licence conditions were focussed on taking steps properly to identify risks and then mitigate them.
- The Panel also rejected Triplebet's case that its general knowledge of its VIP customers sufficed, given Triplebet's failure in breach of the Money Laundering Regulations and licence conditions to maintain appropriate records of its alleged monitoring.
- As stated above, the Panel rejected Triplebet's case that professional gamblers can always be regarded as low risk for money laundering.
- The Panel also rejected Triplebet's argument that the Commission ought to have provided a greater level of guidance as to the standards it required, including relating to syndicates, since the requirements of the Money Laundering Regulations are clear and in any event Triplebet had failed to seek appropriate professional advice as to its obligations prior to June 2019.
Social responsibility failings
The Gambling Commission's Social Responsibility Code requires licensees to interact with customers in a way which minimises the risk of gambling-related harm. The Panel found that, prior to June 2018, Triplebet's social responsibility policies generally failed to comply with this Code provision.
The Panel determined that, in breach of the Code, Triplebet had failed to put into effect its policies and procedures for customer interaction in a number of cases. These included:
- a player who gambled a large sum of money on one day from 0230 to 0430, again at 0700, 0800 - 1100, 1200 - 1230 and 2300 - 2400, with a similar pattern the following day, and no interaction whatsoever
- a player who registered, played and self-excluded on the same day, re-opened his account 6 months later, playing for 10 hours a day on 2 consecutive days and nights, and then losing a large sum in a single day before self-excluding again, all without any monitoring or interaction
- a gambler who lost $714,000 in a year, without any evidence of due diligence being carried out by Triplebet.
In March 2018, Triplebet provided what purported to be its social responsibility policy effective from November 2017. However, this was a customer-facing document which did not comply with the Code. Triplebet stated that a further social responsibility policy did exist but was unable to locate it.
Further, Triplebet accepted that, whatever its policy said, both it and its predecessor policy failed to comply with the Social Responsibility Code provision then in force, by failing to refer to indicators such as time or money spent, and also by failing to contain specific provision in relation to "high value" or "VIP" customers. These were required by the Commission's Licence Conditions and Codes of Practice from May 2015 but were not actually contained in Triplebet's responsible gambling policy until 1st June 2018, three years later. This failure was a cause of Triplebet's failure to identify and sufficiently interact with a number of at-risk players and also syndicates.
Triplebet also accepted that the structure of syndicates resulted in customers not being appropriately assessed from a social responsibility perspective and therefore did not facilitate compliance with licence requirements.
The Panel found that in June 2018 Triplebet had adopted an effective responsible gambling policy. It considered that before then, given the nature of the failings identified in relation to specific customers, that such failings were representative of Triplebet's approach across its customer base.
Triplebet Limited Decision and reasons
The Panel decided to:
- Suspension Triplebet’s operating licence
- Attach additional conditions to the operating licence
- Impose a financial penalty.
The Panel decided to suspend Triplebet's licence with immediate effect.
Triplebet had provided a report from compliance consultants as to the steps which should be taken to bring Triplebet into compliance with the Commission's requirements, but had not implemented all of the steps.
Accordingly, the Panel directed that the suspension should not be lifted until the Commission confirmed to Triplebet that it had received a report from independent auditors, supported by a letter of assurance from Triplebet's directors and personal management holders, confirming that Triplebet had implemented the outstanding recommendations of the consultants.
Additional licence conditions
The Panel decided to impose additional conditions on Triplebet, requiring Triplebet to:
- implement the consultants' recommendations in full
- thereafter, continue to operate in accordance with the changes implemented to meet those recommendations
- instruct a firm of auditors to report to the Commission once those recommendations have been implemented in full, with the scope of the auditors' instructions to be approved in advance by the Commission
- provide auditors' reports every six months on the Licensee's provision of gambling facilities in reliance on the licence setting out whether and to what extent such provision has been undertaken in compliance with the consultants' recommendations and the conditions of the licence. The reports must each be supported by an appropriate letter of representation or assurance from Triplebet's directors and personal management licence holders
- refrain from permitting or facilitating account to account transfers.
The Panel imposed a financial penalty of £739,099 (which included Commission costs of £98,351) for failure to ensure compliance with Social Responsibility Code 3.4.1.
The financial penalty included a deterrence uplift, which the Panel considered to be justified on account of the following aggravating factors:
- the breaches spanned a period of three years
- they arose in circumstances similar to previous cases resulting in publication of lessons to be learned
- the breaches continued even during the review proceedings until Triplebet suspended syndicate betting on 9th August 2019
- Triplebet's responsible gambling policy did not cover what is required by Social Responsibility Code 3.4.1 until June 2018.
The Panel did not identify any mitigating factors.