UK LEGAL COMMENT
A common theme of the action against both the online and land-based operators is inadequate gathering and/ or assessment of evidence on the source of funds deposited by high spending customers. The InTouch Games case is noteworthy because at least part of concerns regarding source of funds arose from the fact that the operator used a payment provider which also acts as an exchange for crypto currencies. If customers may have made a deposit with the payment provider using a crypto currency, operators need to give some thought to how they can, if necessary, obtain documentary evidence demonstrating that the funds had a legitimate origin. Whilst crypto currency transactions are recorded on a permanent and public ledger, tracing the funds back to their source is not as straightforward as reviewing a customer’s bank statement. Affordability issues were also relevant in some of these
cases. In particular, the Casumo decision highlighted as AML failing: “no assessment or limit of how much a customer should be allowed to spend based on known income, wealth or any other risk factors”. This goes somewhat further than anything set out in the Commission’s AML guidance or, indeed, the Money Laundering Regulations. Whilst the outcome of the Commission’s customer interaction and affordability consultation is still awaited, this decision makes it clear that operators are already expected to determine how much their customers can afford to spend and not permit them to exceed that without further evidence. It’s clear that whilst the Commission is in something
recruitment process for an interim CEO. It intends to recruit a permanent leader only once the successor to the Commission’s Chairman takes their post later in the year. By this time, the Government should have published its white paper on the Gambling Act review, allowing applicants for the post of CEO to understand the likely future direction of gambling regulation in Great Britain. McArthur’s departure does not seem to have derailed the Commission’s program of regulatory action. In the second half of March, licence reviews against seven operators were concluded, with total financial penalties of £10.7m. Online operators InTouch Games and Casumo will pay £3.4m and £6m respectively, in relation to social responsibility and AML failings. Five land- based casinos paid sums of between £200k and £380k for similar issues. The penalties imposed on the land- based operators were likely reduced from what they would otherwise have been, due to the difficult financial circumstances casinos have found themselves in after a year of very limited trading.
of a state of flux pending the outcome of the Government’s review and the appointment of a new CEO, its regulatory action is continuing apace. On 1 April, the Commission published its corporate strategy for the next three years. In it, it promises to be evidence-led, take a “targeted and innovative” approach to regulation and use its powers proportionately. With the outcome of the affordability consultation due shortly, it will be interesting to see whether the new requirements are truly based on robust evidence and are proportionate to the aim of protecting those vulnerable to problem gambling.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of
new technology for gambling products and novel product ideas.
APRIL 2021 27
alphaspirit/Adobe Stock
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