The Government of UK territory Gibraltar has acted with a string of punishments against what it describes as failures in anti-money laundering (AML) protections in the Gibraltar gambling sector.
The authority has imposed fines totalling £2.5 million across the whole of the gambling sector, having identified poor controls relating to AML. The fines come after a review carried out by the Gibraltar Gambling Division, which focused on a risk assessment for AML and compliance.
In its formal assessment, the Gambling Division noted that gambling operators had collaborated with the investigation to correct what it described as ‘generic system weaknesses that are common to more than one operator’. However, although the regulator said that AML risk-based controls had improved incrementally, they found multiple instances where the companies allowed risk tolerances that were too great and acted too slowly on AML issues.
In one case, a number of operators had processed money that had originally been stolen from an employer by an individual, who had then fraudulently forged documents and provided false information explaining their source of funds.
In response to the findings, Gibraltar’s government has warned betting operators to heed its warning in the area of AML duties, under which companies are responsible for ensuring that enhanced due diligence is conducted for all customer verification.
Operators have been reminded that they must ensure that they have all the necessary controls and system capabilities to enable them to monitor all player accounts and transactions. Operational and customer support teams must also be trained to a sufficient level as an essential pre-requisite in upholding their AML and social responsibility obligations. Companies have also been reminded of their obligations to report suspicious activity in a timely fashion, as required by the Gibraltar Proceeds of Crime Act 2015 (POCA).
In discussing the fines, the Gibraltar government confirmed that proceeds, which totalled £2.5 million would be distributed through the Gibraltar Gambling Care Foundation which supports the use of training initiatives in AML and social responsibility at the Gibraltar University. The government also warned of the serious nature of the investigation’s findings, emphasising the importance of the Boards of betting companies ensuring that their internal risk assessments are up to standard and stating that the Gambling Division may at some point be forced to take more severe action:
“The fact that this matter has not proceeded to the enforcement stage under POCA supervisory powers in respect of any single issue, does not mean that these powers will not be utilised in the future and the wider industry should heed the learnings detailed in this thematic review.”