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Aspers Stratford hit with financial penalty over AML and player protection failings

| By Daniel O'Boyle
The Gambling Commission has issued a £652,500 ($890,000/€742,000) financial penalty to Aspers’ Stratford City Casino after an investigation uncovered a number of anti-money laundering (AML) and social responsibility failings.

The investigation was launched in December 2018 after the Commission became aware that a member of Aspers’ VIP programme, died by suicide in the early hours 12 November, 2018.

The individual last visited Aspers on 11 November, where they spent £6,100 in cash. They previously incurred significant losses at the venue, including a £51,000 cash purchase.

After X’s death, Aspers immediately launched an internal investigation and created an internal report about its interactions with this customer and the adequacy of these procedures, which it produced to the Commission in December 2018. This report noted regulatory failings and problems with Aspers’ policies that could affect all customers.

In September 2019, the Commission opted to begin a review of Aspers’ operating licence. This identified several failings regarding money laundering and social responsibility, as well as regarding enhanced checks for the use of large amounts of cash or equivalents.

Gambling Commission chief executive Neil McArthur said that while it wasn’t the Commission’s place to examine the circumstances of the player’s death, it was clear that Aspers had certain failings in its policies and how it interacted with him.

“This was a tragic case and our thoughts remain with family,” McArthur said. “The circumstances of the death were investigated by both the police and the coroner. 

“As the regulator, we examined the casino’s management of the individual and found failings around the company’s anti-money laundering, social responsibility and customer interaction procedures.”

The Commission found a number of anti-money laundering failures on Aspers’ part.

It said that the operator’s policies, procedures, and controls “could have been better in some important respects” and also could have been implemented more effectively.

Specifically regarding X, it said Aspers continued to allow them to gamble without performing enhanced due diligence checks as required. Furthermore, the operator failed to effectively monitor X or keep a record of their activity.

This amounted to a breach of Condition 12.1.1 of the Licence Conditions and Codes of Practice (LCCP), the Commission concluded. Condition 12.1.1 states operators must have “appropriate policies, procedures and controls to prevent money laundering and terrorist financing” in place, which must be regularly reviewed and revised if necessary.

Regarding social responsibility, the regulator again found that Aspers’ policies and their implementation were insufficient. It said responsible gambling interactions with X as a VIP customer “did not always take place or were lacking” and that there was a “misguided assumption” that they could afford their gambling losses.

Social responsibility code provision 3.4.1 says that operators must implement policies and procedures for customer interaction if a customer’s behaviour may indicate problem gambling, “with specific provision for those designated as high-value or VIP customers”.

With regard to both AML and social responsibility failures, the Commission added that it was possible that these failures extended to other high-spending customers, but Aspers said that the circumstances in X’s case were “exceptional”.

The Commission also pointed to Aspers’ failings when it came to customers spending large amounts of cash. Licence condition 5.1.1 says operators should have “appropriate policies and procedures concerning the usage of cash and cash equivalents by customers”. Aspers’ own AML policy says cash transactions of £5,000 or more should face further checks.

However, X made cash purchases at Aspers of £46,920 and £51,000 on 2 and 3 September 2017, respectively, without facing any enquiries. The Commission said the operator put “too much reliance on X’s previous winnings” in assuming they could afford their spending, and that the money was the player’s own.

X made additional cash payments of £5,190, £5,660 and £6,100 between September and November 2018, the last of which was made the day before their death.

The Commission said these were not flagged as they were spent on electronic roulette, and only table games were flagged. This constituted a “fundamental weakness in the Aspers’ loose cash policy”, though has since been corrected.

The Commission did note Aspers “sought to rectify the failings identified during the review and implement all of the recommendations made by the internal report in relation to its policies and procedures”.

Ultimately, the regulator opted to issue out both a warning and a financial penalty for breaches of AML, social responsibility and use-of-cash rules. 

The penalty – based on both the severity of offences and Aspers’ finances – initially totalled £1.8m.

However, after the operator provided evidence showing the extent to which its finances had been adversely affected by casino closures and other restrictions to limit the spread of the novel coronavirus (Covid-19), the Commission lowered the penalty to £652,500.

“The Commission has a statutory obligation to take into account any representations received before a financial penalty is imposed,” it said.

In addition, Aspers agreed to divest the £78,233 that it had “accumulated as a result of its failings in relation to X and another customer”.

Aspers was also ordered undertake an independent audit within six months, in order to ensure that all of the changes within its internal reporting were implemented and still in place.

“We will be watching [Aspers’] future conduct closely and this case highlights why all operators must not only have clear policies in place, but that they are up to date and implemented by staff who have the correct training to spot signs of gambling harm or unusual patterns of play,” McArthur said.  

The Commission also warned all other operators to consider to ensure that they were following the AML, social responsibility and use-of-cash rules.

It asked operators to ensure that they keep “a clear, up-to-date, and fit for purpose Responsible Gambling Policy”, have policies to protect new customers before their patterns of play were established and and have robust policies regarding cash that capture all elements of play.

The action taken in the Aspers case marks the second time in a week the Commission has cracked down on AML and social responsibility failings.

Malta-based remote operator and supplier White Hat Gaming agreed to pay a settlement of £1.3m last week. The Commission’s findings in its review of White Hat included a customer who lost £85,500 in 85 minutes, on the same day he opened an account. Another player lost £2,000 in a short period of time, which triggered a customer interaction, but was still allowed to lose a further £50,000 ten days later.

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