All-in: UK Gambling Commission issues record fine over money laundering failures

03 April 2020

The UK Gambling Commission has issued a record £13m fine against Caesars Entertainment (Caesars) for a series of money laundering and social responsibility failures. The penalty package also includes the imposition of additional licence conditions focused on strengthening anti-money laundering (AML) practices and training.

This latest fine from the Gambling Commission comes just a few weeks after it issued a record (at the time) £11.6m fine against Betway for similar money laundering failures. The Gambling Commission has been particularly active in 2020, having so far issued a total of £27m in penalties and suspended a handful of operating licences.

A key focus of the investigations against Caesars and Betway has been on so-called “VIP practices”, which incentivise high-spending customers to spend more money. In both instances there was evidence that due diligence on “VIPs” was seriously lacking.

In Caesars’ case, examples of key failures included:

  • not conducting adequate source of funds checks on a customer who spent around £3.5m over a three-month period and on a politically exposed person who lost £795,000 over the course of 13 months; and
  • neglecting to carry out enhanced customer due diligence checks on other customers when appropriate, including on a customer who lost £240,000 in a 13 month period.

In addition to the fine, the Gambling Commission has imposed a number of additional conditions on Caesars' licence, which include:

  • ensuring all personal management licence holders, senior management and key control staff undertake outsourced AML training and annual refreshers;
  • implementation of annual AML training for all staff, tailored to individual roles; and
  • an annual review of the effectiveness of group AML policies and to instruct external auditors to undertake an annual audit of those reviews.

Both investigations have served as a reminder that active co-operation with the regulator is a sensible policy. The Gambling Commission recognised “openness and co-operation” as a mitigating factor in the Caesar investigation and similarly noted full co-operation in the Betway investigation. Other mitigating factors in the Caesars investigation included voluntary disclosure of the results of an internal investigation and the proposal of a regulatory settlement at an early stage in the process.

The imposition of two record fines in less than a month signals a show of intent from the Gambling Commission. With ever-greater scrutiny on the AML procedures of gambling businesses, it may only be a matter of time until this record is broken.

Neil McArthur, Chief Executive of the Gambling Commission, said: “We have published this case at this time because it’s vitally important that the lessons are factored into the work the industry is currently doing to address poor practices of VIP management in which we must see rapid progress made.