With the back-to-back release of public statements, regulatory actions by the Gambling Commission are coming thick and fast. On 17 January the Commission announced it had agreed a regulatory settlement with the online gaming company, Vivaro Limited trading as Vbet, in respect of its AML and responsible gambling failings. Following swiftly on its heels was the statement of action taken against another online gaming company, TonyBet, for imposing unfair terms and for its AML and responsible gambling failings.
With financial penalties of £302,500 and £442,750 respectively, Vivaro Limited and TonyBet are the latest in a recent spate of highly publicised enforcement cases instigated by the Gambling Commission. In the last six months alone, the Commission has taken action against 10 businesses in respect of their AML and other failings and in doing so it has demonstrated the breadth of its armoury. In addition to some record breaking financial penalties and costs, there have been warnings, supplementary licence conditions and the increasingly relied upon requirement for businesses to undertake a third-party audit and then provide the findings to the Commission, warts and all.
Whilst some of these recent enforcement cases clearly relate to the biggest gambling businesses in the sector and may therefore seem in a league of their own, it is of note that all the actions are based on breaches of licence conditions which apply to virtually all gambling businesses no matter the size. And the Gambling Commission clearly expects all licensees to take heed, with the Director of Enforcement and Intelligence flagging up, in relation to their case against Petfre (Gibraltar) Limited, that they ‘expect… all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.’
For gambling businesses ‘active compliance’ means delivering the licensing objectives set out in the Gambling Act 2005, one of which is to prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime. On a more granular level it means compliance with the conditions of their licence which include the AML requirements to conduct a risk assessment and have in place policies and procedures which reflect this risk assessment. For gambling businesses within the regulated sector, it also means meeting the obligations of the Money Laundering Regulations.
In line with the Money Laundering Regulations, the Gambling Commission understands that compliance is far from a one size fits all but businesses must be able to demonstrate they have considered all facets of their business model, have assessed the specific risks they face and put into place effective and proportionate procedures. Crucially, active compliance does not mean that mistakes cannot happen or that breaches will never occur because it is inevitable some businesses will fall foul even with the best of intentions. Active compliance means taking all reasonable steps and exercising all due diligence. As the Commission’s recent actions show, failing to do so could lead to regulatory action. At its most severe it could also lead to criminal proceedings not only against the business but also potentially against its directors, officers and employees.