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32Red to Pay £2m Penalty Package


June, 20th 2018

Online casino operator 32Red have been penalised for not protecting a player from gambling-related harm and money laundering failures.

A Gambling Commission investigation which focused on 32Red's dealings with a player who between November 2014 and April 2017 was allowed to deposit £758k without carrying out adequate social responsibility or money laundering checks. The investigation also showed that 32Red failed to check that the player could afford their spending on the site.

The Gambling Commission said 32Red should have intervened after the player admitted to staff they had spent too much, displayed frustration and kept gambling to chase their losses.

It was revealed that during that time, there were at least 22 incidents which indicated the player was a problem gambler - but instead of checking if they needed help, 32Red gave them deposit match bonuses to entice further play. Under the terms of their current licence, monitored by the Commission, operators must intervene if they believe a player's behaviour indicates gambling addiction. The transgressions were aggravated by the fact that 32Red had not learned from similar incidents in the past year that resulted in other gambling companies being fined.

From October 2016 all licensees are required to conduct an assessment of the risks of the business being used for money laundering or terrorist financing. 32Red failed to do this, which is a breach of licence condition 12.1.1 (Prevent money laundering and terrorist financing.)

Following the implementation of revised anti-money laundering policies, procedures and controls, 32Red should have reviewed the player's account in August 2016 specifically for source of wealth, as well as other checks, but because of the existing relationship the player was deemed low risk and de-prioritised. At this time, life time deposits were in excess of £235k.

A more in-depth review of the player's account was only performed in January 2017, as a result of unusual play suggestive of possible problem gambling (a seven-figure win, instantly replayed). The life time deposits were now nearly £500k. Following the review, a disclosure was made to the nominated officer and source of wealth requests were made, but information was not received for a further five weeks despite continued play. The documentation supplied did not support the level of deposits, but 32Red took no further action until the account was suspended in April 2017, by which life time deposits were £758k.

Gambling Commission Executive Director, Richard Watson said: "Instead of checking on the welfare of a customer displaying problem gambling behaviour, 32Red encouraged the customer to gamble more - this is the exact opposite of what they are supposed to be doing. Operators must take action when they spot signs of problem gambling and should be carefully reviewing all the customers they are having a high level of contact with. Protecting consumers from gambling-related harm is a priority for us (the Gambling Commission) and where we see operators failing in their responsibility to keep their customers safe we will take tough action."

32Red, part of the Swedish-owned, but Malta-based Kindred Group, will pay a penalty package of £2,024,046 which includes a payment of £1.3m in lieu of a financial penalty.

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