Following an investigation and licence review, the Gambling Commission has announced that it has fined Boylesports Enterprise (“Boylesports”) £2.8m, as well as imposing licence conditions and giving an official warning, following money laundering failures.
The Commission’s investigation found that Boylesports had failed to comply with the Commission’s Licence Conditions and Codes of Practice, specifically licence conditions 12.1.1 and 12.1.2, as well as elements of the Money Laundering Regulations (“MLR”) as it had:
Failed to have an appropriate money laundering risk assessment in place;
AML policies and procedures which were unsuitable, and as a result could not be effectively implemented; and
Failed to comply with elements of the MLR.
As a result, the Commission issued Boylesports with a warning under s117(1)(a) of the Gambling Act 2005, imposed a financial penalty of £2.8m and attached the following conditions to its licence:
Maintaining the appointment of an appropriately qualified Money Laundering Reporting Officer who holds a Personal Management Licence and undertakes annual AML training;
Ensuring relevant staff take part in outsourced AML training and annual refresher training; and
Keeping under ongoing review the effectiveness of its AML policies, procedures and controls.
This latest enforcement action shows that the Commission continues to scrutinise operators and undertakes a robust approach when it considers operators have inadequate anti-money laundering controls. Richard Watson, executive director at the Commission emphasised that “it is vital that all gambling businesses have effective anti-money laundering policies and procedures firmly in place and as part of our ongoing drive to raise standards we will continue to take tough action against operators who do not”. Operators must keep their own AML policies and procedures under regular review, ensuring these are appropriate as well as effective in practice.
The public statement is short and does not provide any real detail in relation to the nature and severity of the failings by Boylesports. However, it is noteworthy that the financial penalty issued to Boylesports (as a result of a licence review that was not settled) is significantly higher than the recent regulatory settlements reached by BGO Entertainment Limited, Games Account Network Plc and NetBet Enterprises Limited following AML and SR failings which we reported on here.
Operators involved in Gambling Commission enforcement action should consider whether an early regulatory settlement is appropriate. In this regard, Neil McArthur’s Chief Executive’s message in the Commissions Compliance and Enforcement report 2019-2020 focuses on regulatory settlements and highlights the Commission’s view that “there are too many occasions where settlement proposals are made at a late stage of our investigation process or approached as if a licence review is a commercial dispute to be negotiated. That is not acceptable…settlements are only suitable where a licensee is open and transparent, makes timely disclosures of the material facts, demonstrates insight into apparent failings and is able to suggest actions that would prevent the need for formal action by the Commission. Only licensees who meet those criteria need make settlement offers; licensees who choose to contest the facts before conceding at a later stage need not make offers of settlement.”