Online poker, casino, sports betting, and bingo site 32Red will have to pay a massive penalty of more than £2 million following its failure to abide by anti-money laundering and customer protection guidelines. The United Kingdom Gambling Commission announced this judgment in a statement on its website dated June 20, 2018.
At the center of this incident is a customer who has been playing with 32Red since 2011. From the time the company started operating under a UKGC license in November 2014 until April 2017, it accepted a total of £758,000 in deposits from the individual. The unnamed user, referred to in documents solely as “Customer A,” was a frequent player at 32Red and had earned VIP status at this online casino.
Not only was the total sum deposited quite high compared to what most other users can afford to spend on internet gambling, but there were other indications that Customer A might have had a problem. He or she contacted support on 22 separate occasions to complain about losses, express frustration, and lament the amount of money spent on gaming.
Rather than assisting this client in how to properly use the responsible gaming features of the site or giving directions toward problem gambling resources, the casino credited free bonuses to the account so that Customer A could continue playing.
In January 2017, something happened that finally convinced 32Red that Customer A might be suffering from gambling addiction. The player won a seven-figure sum at the casino – and instantly risked it all again on another bet!
Casino management belatedly started asking some questions and requested that the user supply proof of income documentation. It took five weeks for Customer A to send in the appropriate paperwork. During this time, the account in question was not suspended but rather remained open, and the customer continued to play.
The income claimed by the player was £13,000 per month: not a bad salary at all but certainly insufficient to support the average monthly deposits of more than £45,000 that Customer A made at 32Red. Even this five-figure monthly income was determined to be fake by the UKGC. They discovered that the real income level of Customer A was a mere £2,150 per month.
The casino did not realize that anything was amiss, however, and allowed the player to continue betting. The UKGC stated that the material the user submitted “was not credible” and chastised 32Red for failing to perform a few simple checks, like Google searches, that would have revealed the deception.
32Red was found to be in breach of the Social Responsibility Codes of Practice for failing to heed the warning signs that Customer A was a problem gambler. Moreover, the company did not adhere to the provisions of the 2007 Money Laundering Regulations because it failed to assess the risks of money laundering and possible terrorist financing involved in accepting such a large volume of deposits without any solid information regarding the source of the wealth.
32Red did not dispute the determinations of the UKGC and has agreed to pay certain fines. The penalty package levied against 32Red consists of the forfeiture of £709,046 that it made from Customer A's gambling, £1.3 million for speeding up the delivery of the National Responsible Gambling Strategy, and £15,000 to cover the costs of the UKGC's investigation.
Also as part of the settlement with the Gambling Commission, the firm will undertake certain enhancements to the way it currently does business so as to better fulfill its anti-money laundering and responsible gaming obligations. There will be an outside audit of 32Red's policies, and efforts will be made to implement whatever suggestions the auditors make. Moreover, new policies will be drafted to counter the threats of terrorism and money laundering with regional provisions specific to Great Britain implemented.
32Red's parent organization, the Kindred Group, has created a sophisticated program known as the Player Safety - Early Detecting System that incorporates automated processing of betting patterns with an individualized approach to customer messaging in order to identify and reduce the severity of problem gaming. 32Red has promised to deploy this system on its own platform.
32Red has been in operation since 2002. Its casino is powered by the reputable Microgaming software, and this same vendor provides the network that 32Red's poker room is housed on. In addition, there's a sportsbook, virtual bingo hall, and live dealer casino for customers to enjoy.
This casino operation has received more than its fair share of accolades during its history. They include 11 Casino of the Year awards from Casinomeister as well as a special Casino of the Decade trophy in 2009. In 2013, Etruvian Consulting used a mystery shopper approach to identify the best online casino customer support among 16 leading brands, and 32Red walked away with the crown, scoring 8.8 out of 10.
For the year 2016, 32Red booked revenues of £62.3 million, but this was the last full year that the organization transacted as an independent body. In June 2017, the Kindred Group purchased 32Red for approximately £175 million. Kindred owns more than a dozen online betting companies, including Unibet, Roxy Palace Casino, and bingo.com. For the year ending Dec. 31, 2017, Kindred booked revenue of over £751 million.
The United Kingdom's Gambling Commission has not been shy in punishing what it believes to be gross violations of the gaming rules especially when it comes to customer protection and possible money laundering.
In May, LeoVegas was held culpable and forced to fork over more than £600K. It was decided that the company had engaged in deceptive advertising practices and furthermore had failed to prevent self-excluded customers from logging in and playing.
In February, well-known and respected bookmaking firm William Hill was penalized to the tune of £6.2 million for accepting seven-figure deposits linked to criminal activity without performing the necessary due diligence required to uncover the source of the funds. Many of the depositing customers did not have incomes that would support such lavish spending habits, raising social responsibility concerns too.
In August 2017, the Commission handed out its most punishing verdict ever when it hit 888 with a mammoth £7.8 million fine. This gaming group had allowed self-excluded users to play, and it also did not recognize the signs of problem gaming on multiple occasions.
Not only do British online gaming entities have to scrupulously obey the mandates of the UK Gaming Commission, but they must also follow the dictates of other regulatory bodies too. Perhaps the most notable of them is the Advertising Standards Authority (ASA). The climate in which wagering enterprises must operate is seemingly becoming more constrained as the authorities crack down on ever more minor infractions.
In May, the ASA upheld complaints against the m88.com casino for advertising to children. The violations that triggered the investigation were the placement, on m88's own pages, of graphics depicting characters from the fairy tale slots that the website offered. m88 was ordered to stop showing these images on its website.
In April, the ASA decided that a PokerStars TV spot promoted reckless gambling. The video showed a player bluffing after contemplating all the times he had bluffed himself in real life. PokerStars was forced to stop broadcasting the ad.
With such a restrictive environment for online gambling businesses in the United Kingdom, it's no wonder that there's still a place for offshore gaming sites within the British market. These organizations serve up sportsbetting, casino, and online poker play to customers without being hamstrung by the punitive decisions of overzealous government departments.