888 Fined £9.4M in UK for AML Failings, License Revocation Threat

Posted on: March 1, 2022, 06:05h. 

Last updated on: March 1, 2022, 01:02h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

It could be a case of three strikes and you’re out for online gambling behemoth 888.com. On Tuesday, the UK gambling regulator (UKGC) announced it had fined the operator £9.4 million (US$12.6 million) for social responsibility and anti-money laundering (AML) failings.

888
888 was found to have breached anti-money laundering controls by not rigorously checking the source of customers’ funds and their affordability to gamble. (Image: The Guardian)

It’s one of the biggest penalties the UKGC has ever meted out to an online operator, and it comes four and a half years after 888 was fined £7.8 million (US$10.6 million) for failing to protect vulnerable customers.

Andrew Rhodes, UKGC chief executive, said in a statement that any future infractions would give the regulator cause to “seriously consider the suitability of the operator to uphold the licensing objectives and keep gambling safe and crime-free.”

While 888 is a global business that has recently made inroads in the US, the UK remains a core market, accounting for over 40 percent of its revenues. Losing its UK license would be a disaster for the company.

In the wake of Tuesday’s announcement, shares dropped almost seven percent on the London Stock Exchange in early trading.

Poor Scrutiny

According to the UKGC, 888’s transgressions include implementing a policy where customers were permitted to deposit £40,000 (US$54,000) before source-of-funds (SOF) checks were carried out. One customer was allowed to deposit £65,835 (US$88,200) in just five months without any kind of scrutiny into their finances.

Meanwhile, the UKGC accused 888 employees of accepting “verbal assurances” from gamblers about their employment income rather than documentary evidence. On one occasion where the operator had inquired about affordability, it imposed a £1,300 (US$1,740) monthly deposit cap on a player it knew to be a National Health Service worker earning £1,400 (US$1,876) a month.

There is no magical threshold of gambler spending in the UK at which SOF checks are required. UKGC rules simply state that operators must do their own risk assessment and implement robust procedures to establish a customer’s source of funds and affordability levels to gamble.

But all gambling operators have legal duties under the Proceeds of Crime Act 2002 (POCA) and the Terrorism Act 2000 (TACT) to mitigate financial crime.

Social responsibility failures included not carrying out any interaction with a customer who lost £37,000 (US$50,000) in a six-week period during the Covid-19 pandemic.

Since problem gamblers sometimes turn to crime to fund their habits, operators must have rigorous procedures and controls in place to prevent money laundering.

‘Failing Customers’

In August 2017, 888 was fined after a software glitch allowed more than 7,000 customers who had chosen to self-exclude to access their accounts on the platform. These customers were able to deposit £3.5 million (US$4.7 million) into their accounts and continue to gamble for over 13 months before the issue was detected.

The circumstances of the last enforcement action may be different but both cases involve failing consumers – and this is something that is not acceptable,” Rhodes said.

“Consumers in Britain deserve to know that when they gamble, they are participating in a leisure activity where operators play their part in keeping them safe and are carrying out checks to ensure money is crime-free.”