Friday, April 9, 2021

UK gambling regulator fines White Hat Gaming over anti-money laundering failings

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UK gambling regulators have reached a £1.3m settlement with licensee White Hat Gaming after the company’s approach to social responsibility (SR) and anti-money laundering (AML) was found wanting.

On Thursday, the UK Gambling Commission (UKGC) announced the regulatory settlement with White Hat Gaming regarding its “inadequate” policies and procedures for identifying and managing customers deemed to be at a higher risk for problem gambling and money laundering.

The shortcomings involved seven customers’ accounts at four White Hat sites – Grandivy.com, 21Casino.com, Hellocasino.com and Dreamvegas.com – that emerged following a March 2019 UKGC compliance assessment. The following January, the UKGC notified White Hat that the regulator had commenced a review of its remote operating license.

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In one case, a customer lost £70k over a three-month span in 2018, after which White Hat created a customer intelligence report that eventually concluded the customer was sufficiently well-heeled to absorb these losses. However, White Hat failed to lock the customer’s account while it was identifying their source of funds (SOF), a move the company acknowledged was incorrect.

In two other cases, one customer lost £50k in six hours while another lost £85,500 in just 85 minutes. While White Hat made interventions in both cases, the UKGC concluded that these interventions “were not delivered effectively in accordance with the social responsibility code.”

As for the AML shortcomings, White Hat allowed one customer to lose £70k over a two-year period despite the company admitting having ‘limited knowledge’ of the customers’ SOF. In another case, White Hat requested SOF evidence from a customer who lost £55k over a two-year period, but failed to properly corroborate the bank statements provided by the customer.

The UKGC said White Hat had cooperated with its investigation and there was no evidence suggesting the breaches were committed intentionally. White Hat also agreed to a number of enhanced customer protection measures, including ‘backstop limits’ to automatically prevent customers from further gambling after certain AML and SR triggers have been met.

White Hat’s settlement consisted of a financial penalty of £1.33m and nearly £10k to offset the UKGC’s investigation costs. The UKGC says the funds will go toward realizing its National Strategy to Reduce Gambling Harms.

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This marks the first instance of the UKGC dragging one of its licensees to the regulatory woodshed in 2021. Last year saw an unprecedented number of regulatory spankings, building on the previous year’s actions that saw financial penalties rise by 50%.

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