Videoslots to Pay £650,000 for AML and Social Responsibility Errors

Operator Videoslots has been fined £650,000 by British regulator the Gambling Commission after being found to have committed anti-money laundering (AML) and social responsibility failures.

Videoslots operates Videoslots.co.uk, MrVegas.com and MegaRiches.com. On top of the fine, Videoslots will receive a warning and will be required to undergo a third-party audit, where the company will have to show it is effectively implementing its AML and safer gambling policies.

Social responsibility misses

With regards to social responsibility, Videoslots was found to have relied on systems which did not effectively monitor customer activity in a way that could identify harmful or potentially harmful gambling. The investigation found that even though the operator’s monitoring systems were automatically setting a monthly deposit limit for players, the limit ran across a calendar month and did not include the customer’s initial deposit.

As a result, one player, who had set a deposit limit of £3,000, lost £5,000 in a month, while another player lost £5,000 in less than 24 hours after setting a £3,000 monthly deposit limit. There was also an instance of a customer losing £7,500 across 18 days, despite having set a monthly deposit limit of £2,000.

Additionally, monitoring systems deployed by Videoslots were deemed to have not effectively identified customers who were at risk of gambling harm, with one player losing £6,550 over the course of three active days of gambling within a two-month period, without having any interaction with the operator.

AML charges

There were also multiple examples of AML/countering terrorist financing (CTF) failures. These included gaps in associated policies and procedures, record management omissions, and an over-reliance on an algorithm in attempts to identify and monitor customer behaviours. In some instances, the reliance on the algorithm was deemed to be ineffective when tested.

An example of this was a customer who showed a high level of depositing and gambling activity over the course of 16 days, where their account was funded using digital pre-payment vouchers which totalled in excess of £75,000. After the gambling activity, the proceeds were transferred to four different bank accounts. The customer was also found to be accessing their account from outside Great Britain.
“Unacceptable delays”

Despite all of those factors, the customer did not trigger the threshold for Videoslots to request source of funds information in a timely manner, as their AML risk score was still not high enough. The Commission said this led to “unacceptable” delays in the account review process. There had been a presumption the activity was funded from recycled winnings, but this was without supporting evidence.

In a separate example, a customer’s risk profile was not scrutinised hard enough after the customer made a high frequency of deposits and withdrawals over the course of a month. Once again, Videoslots made the assumption that this could be explained by the player making a significant profit and then recycling the winnings.

John Pierce, Director of Enforcement for the Commission, said: “Operators are required to have effective social responsibility and anti-money laundering policies, procedures and controls as a condition of holding an operating license.

“Alongside the financial penalty and the necessary steps already taken by Videoslots to address our findings, the operator must also complete an independent audit and we will monitor the outcome of this closely.”