Monday, July 9, 2018

32Red Left Red-Faced Over Problem Gambler

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32Red Left Red-Faced Over Problem Gambler
32Red Left Red-Faced Over Problem Gambler

Online gambling has never been more popular, what with thousands of online websites catering for bingo, casino and even sports betting enthusiasts. But, gone are the days when punters could sign up to a gambling site, deposit cash and have some fun – because nowadays, companies will dig into your financial background to make sure you can afford to spend cash.

Why the sudden change though?

The recent changes have come into effect courtesy of the online gambling operator; 32Red, who have been hit with a £2m fine from the Gambling Commission, for failing to protect a problem gambler, with a penalty also imposed relating to money laundering failures. Between November 2014 and April 2017, 32Red should have recognised that one particular punter had a gambling problem. There were no less than 22 incidents recorded, where one customer deposited a total of £758,000, without any money laundering or social responsibility checks being carried out.

Big troublesome bonuses

Bonuses are offered as a way of not only rewarding players but as an incentive to carry on gambling, this is a process that has landed the company in hot water! Instead of the company recognising there was an issue, they offered more bonuses to the player, to encourage them to place more and more bets.

Comments

Richard Watson, executive director of the Gambling Commission said: “Instead of checking on the welfare of a customer displaying problem gambling behaviour, 32Red encouraged the customer to gamble more - this is the exact opposite of what they are supposed to be doing. Operators must take action when they spot signs of problem gambling and should be carefully reviewing all the customers they are having a high level of contact with."

Customer accounts should have been reviewed in August 2016, the Gambling Commission stated, but it was only done five months later in January 2017, because of a big win. The punter at the centre of the penalty fine scooped a whopping £1m win in January 2017, but it wasn’t cashed out, it was gambled again - instantly. Alarm bells suddenly started ringing and the company contacted the individual to request information on their financial position; such as payslips and evidence on income, but it took almost five weeks for the customer to respond, despite regular gambling during this period. Support wasn’t provided when the information was received, because it took a further three months for 32Red to suspend the clients account.

According to the Gambling Commission, the documents supplied were “not credible and showed volatility in receipted income.” How could someone on a monthly net income of just £13,000, deposit in excess of £45,000 per month? In fact, further digging showed that the customer in question, only had an average monthly income of just £2,150 – almost £11,000 less than originally stated.

“Simple open source checks which could have been indicators of the customer’s source of wealth were not performed – eg searching typical salaries for the occupation, searching Google maps on the home address.”

The Gambling Commission was asked if the individual had stolen the cash to gamble with, to which a spokesman for the Gambling Commission said: "The source of the customer's wealth was not known to 32Red because they failed to fulfil their anti-money laundering obligations. We cannot comment on any other proceedings that may be active."

Fine by me

The total fine of £2m included:

£709,046 divestment of financial gain. £1.3m to be made to the National Responsible Gambling Strategy, which tackles problem gambling. £15,000 fee towards the cost of the whole investigation. Improvements to policy, procedure and risk management.

The conclusion of the findings also ruled that there were significant license condition breaches, over a sustained period of time as well as failure for the operator to learn from previously published cases.

Kindred, the Swedish online betting company who acquired 32Red in June 2017, have accepted the penalty and have stated that they are “working hard” to improve. Already, a number of changes and improvements have been made by the operator to stop this happening again, which include;

An independent audit of policies, procedures and controls. A full review of all active customers’ accounts. Introduction of Group Anti-Money Laundering/Counter Terrorist Financing (AML/CTF) Policy. Learnings from public statements and much more. What checks should be carried out?

Aside from the usual identification checks, which are required by all online gambling websites, some companies may go above and beyond the requirement for basic details. This means that players will need to submit more detailed information, which can be quite alarming to some. Handing over a copy of your driver’s license or bank card is problematic enough, but what happens when you have to start handing over more than this?

Sky Casino are just one of the companies who may ask for some additional information about you, or the source of your account funding – from the Safer Gambling Team. Gambling licenses provided by the UK Gambling Commission state that; “One of our licensing requirements, is to pro-actively engage in initial and ongoing due diligence. If we ask you to provide source of funds documentation, it is important to make sure that you provide evidence that identifies the actual source(s) of funds that you use to bet or play with and that it matches up with and can substantiate your betting activity.”

Other documentation that may be required from any gambling company, could include one or more of the following:

Proof of earnings: Payslip/Director remuneration/Dividends/Pension. A bank statement/savings account that clearly shows consistent incoming values from an identifiable source. A Trust deed clearly showing a consistent entitlement to funds. Dated proof of an award/payment made to you. Other clear evidence that would support "affordability" in relation to your business with the operator.

Source:

"32Red to pay £2m penalty package for failing to protect a consumer", gamblingcommission.gov.uk, 20 June 2018

"Know your customer checks (KYC)", skycasino.com, 14 February 2018

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