The United Kingdom Gambling Commission (UKGC) has warned gambling operators that they will be fully liable for regulatory misconduct even in cases where the failures took place before they owned a specific brand. UK’s gambling watchdog issued the warning after slapping Daub Alderney Limited with a £5.85 million ($8.09 million) fine following social responsibility and anti-money laundering breaches.
Daub Alderney is the operator behind several popular UK-facing online gaming sites, including spinandwin.com, luckyvip.com, luckypantsbingo.com, kittybingo.com, and aspers.com. On top of the hefty fine, the UK Gambling Commission also issued a formal warning to the operator for misconduct flagged between January 2019 and March 2020. After issuing the fine to Daub Alderney, Helen Venn, the Executive Director of the UKGC, said:
“This case was the result of planned compliance activity, and every operator out there should be aware that we will continue to take firm action against those who fail to raise standards.”
Social Responsibility Failings:
Following a hearing before the Regulatory Panel and a review of its operator license, Daub Alderney was found guilty of three counts of breaching the social responsibility code provision (SRCP) and non-compliance with one UKGC license condition. The regulations that Daub Alderney breached according to the UK Gambling Commission are as follows:
- SRCP Paragraph 1(e) of 3.3.1 (Customer Interaction) and from 31 October 2019 paragraphs 1 and 2 of SRCP 3.4.1
- SRCP 1.1.2 – responsibility for third parties, paragraphs 2(a) and (c)
- SRCP 5.1.6 (Compliance with advertising codes)
- License Condition 16.1.1 – Responsible placement of digital adverts (paragraph 1c)
Some of the examples cited in the hearing were a case where a player’s losses hit a total of £43,410 ($60,058) within four months. The operator let this happen even though the customer had shown signs of problem gambling – such as using four different payment cards in a day and reversing requested cash-outs worth £133,873 ($185,213).
In another instance, a customer who was just a month old on one of the operator’s platforms lost £40,500 ($56,032). For this case, the operator only sent the player two safer gambling notices and a pop-up message. These messages weren’t assessed for effectiveness in promoting safer gambling.
Additionally, another consumer made £39,000 ($53,935) in losses in a span of three and a half months but only received a single safer gambling notice and two pop-up messages. Like in the previous case, the effectiveness of the messages was also not evaluated.
Anti-Money Laundering Failings:
I the regulatory hearing, Daub Alderney was also found guilty of being non-compliant with two anti-money laundering license conditions as follows:
- Paragraphs 2 and 3 of Licence Condition 12.1.1 – (Anti Money Laundering – Prevention of money laundering and financing)
- License Condition 12.2.12 Anti-Money Laundering measures of operators based in foreign jurisdictions
For the anti-money laundering breaches, some of the examples cited include a situation where a player was allowed to load £50,000 ($69,147) without being asked to provide a source of funds documentation. Similarly, another customer was also allowed to deposit a total of £41,500 ($57,392) within a month without submitting adequate source of funds evidence.
Further, a third customer ended up losing as much as £53,000 ($73,296) over a period of eight months. For this player, the only source of funds evidence the operator obtained was establishing that the consumer resided in a house with an estimated value of £233,000 ($322,226).
Liability Stands Even for Operators that Changed Parent Company
Daub Alderney Limited is part of the Stride Group, which Rank Group acquired in October 2019 in a transaction worth £115.3 million ($142.2 million). Rank Group is also the parent company of popular operators serving the UK gambling market, such as Grosvenor Casinos and Mecca Bingo.
In her statement after Daub Alderney’s Verdict, Ms Venn indicated that the UKGC acknowledged that most of the regulatory failings took place before the October 2019 buyout. However, the executive director further pointed out that while there had been compliance improvements since Rank took over the business, it did not absolve Daub Alderney of the transgressions. She added:
“The Licensee’s culpability, and the requisite penalty reflecting that culpability, cannot be affected by the fact that its shares have now passed from one set of investors to another. The Licensee does not escape or mitigate the consequences of its actions because its shares are sold.”