UK LEGAL COMMENT
The Hunter Becomes the Hunted
S Alexander Von Durën/Adobe Stock
eptember 2021 has seen the Gambling Commission publish the outcome of two regulatory reviews against licensees Daub Alderney (which operates a number of white label sites) and EU Lotto (which operates
lottoland.co.uk). Both operators were fined by the Commission, with Daub Alderney paying £5.85m and EU Lotto £760,000. However, this month the Commission has been the subject of reviews itself, with the publication of the results of an independent enquiry into its handling of the issues arising from the collapse of Football Index and the launch of an enquiry into its competence and effectiveness by the Parliamentary All Party Betting & Gaming Group (APBGG).
Northridge Law’s Melanie Ellis looks back on an interesting month for the Gambling Commission
Regulatory action by the Commission
The issues leading to the fines imposed on both operators are familiar ones, with a focus on the need to limit customers spend pending receipt of required evidence on source of funds or a response to responsible gambling messages and requests. Daub Alderney’s fine was increased from the lower original amount of £3m, following a request by the operator that the amount be considered by the Regulatory Panel. The operator now plans to appeal the case to the First-tier Tribunal, a particular issue for consideration being the fact that the failings occurred before the company was purchased by its current owner the Rank Group. In the statement published on its website, the Commission noted that licensees cannot avoid the full consequences of regulatory failures even if breaches occurred prior to a change of ownership. One positive development in the Commission’s summaries of the operators’ failings is that it now appears to understand that it is customer deposits (rather than losses) which are relevant for AML considerations and losses which are more relevant in relation to problem gambling and affordability. In the past, the focus on deposits and losses under the headings of AML and responsible gambling has been somewhat mixed. In another helpful development, the later statement
regarding EU Lotto includes more detailed examples of the failures identified by the Commission. In previous statements (including that for Daub Alderney) the Commission has detailed the amounts lost by customers, “without providing adequate source of funds evidence” or “despite receiving just two safer gambling messages”. However, in relation to EU Lotto the Commission has identified more precisely what the operator should have done differently. Of particular note, because these expectations are not clearly set out in guidance, are that: • customer interactions should, where appropriate, require a response from the customer;
• bank statements provided by customers to prove their address should also be analysed from an AML perspective;
• customer accounts should be restricted following source of funds requests, until the required information has been provided; and
• from an AML perspective, information should be obtained to demonstrate how much a customer should be allowed to spend based on income, wealth or any other risk factors.
30 OCTOBER 2021
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