UK LEGAL COMMENT
Compliance failings
Northridge Law’s Melanie Ellis highlights some practical takeaways from the latest regulatory action taken by the Gambling Commission.
early October 2022. In the interim, the role was apparently taken over by the holder of a number of other key management roles within the business, likely because no other suitably qualifi ed and experienced person was immediately available to take it on. The licence breach here could have been avoided by the operator submitting details of the employee’s departure as a key event within fi ve working days, and seeking the Commission’s approval for the role to be occupied by the holder of another key role on an interim basis. Another breach the licensee could have easily avoided was
the failure, for year ending December 20221, to make a contribution to a Commission-approved organisation to support research, prevention and treatment for those harmed by gambling. It may be that the operator made a signifi cant contribution to another non-approved body in that year, but a donation of just £1 to an approved organisation would have been suffi cient to ensure compliance with the requirement. The proposed introduction of a statutory levy will avoid any confusion over the donation requirements in the future, however the Government’s consultation setting out proposed rates for different sectors has yet to be published, despite being anticipated by the end of Summer 2023. A key fi nding by the Commission was that Lindar Media’s AML
risk assessment was insuffi cient. An important takeaway for operators is that the Commission’s expectations for this document are much higher than they were fi ve years ago (when this operator obtained their licence). The Commission’s own risk assessment (published in December 2020) is a good starting point for an acceptable format and content, but operators need to ensure all emerging risks highlighted in the Commission’s regular bulletin are incorporated, as well as all risks detailed in the Commission’s latest AML guidance. Operators must review and update their AML risk assessments in light of any changes in circumstances and at least annually Defi ciencies were also found in the operator’s AML policies
O 34 OCTOBER 2023
he latest regulatory action by the Gambling Commission, which resulted in a voluntary settlement with Lindar Media Limited (the operator of casino and bingo website MrQ), highlights a number of compliance failings.
Individually any one of these likely wouldn’t have resulted in formal action but taken together it appears the Commission considered they tipped the balance. The issues identifi ed are worth noting by other operators to avoid the same pitfalls and I’ve highlighted below some practical takeaways, which apply to both remote and non-remote casino operators. Some are also of interest in the context of the Commission’s proposals for fi nancial checks. One of the failings identifi ed by the Commission is a relatively common scenario for smaller operators; it appears the person holding the regulatory compliance key role left their position in June 2022 and the operator was unable to fi ll that role until
and procedures. Other casinos operators should note that the Commission found it inappropriate for the operator to assign all customers a money laundering risk rating of “low” at the start of the business relationship, on the basis that the operator would have insuffi cient information at this point to adequately assess the money laundering risk. The Commission has not explained what risk rating such customers should be assigned, instead, at the start of a business relationship. Given that the requirements on registration are only to obtain and verify the customer’s name, address and date of birth, it would be diffi cult to assign any risk rating other than “low” at that point, other than when initial searches against the customer’s details fl ag a high-risk factor such as that the customer is a PEP or is sanctioned.
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