Isle of Man regulator fines Celton Manx %5.3 million over widespread AML failures

The Isle of Man Gambling Supervision Commission has imposed a £3.9 million ($5.31 million) penalty on Celton Manx after uncovering what it described as a significant series of breaches tied to anti-money laundering (AML) and counter-terrorist financing (CTF) obligations. The sanction follows an extensive inspection that found systemic compliance failures across the company’s operations.

Celton Manx, an online gambling product provider, held its Isle of Man license from August 2008 until it surrendered the approval in May this year. Before the surrender took effect, the Commission conducted an in-depth review under the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018, which revealed numerous contraventions.

The regulator cited failures that included inadequate oversight of network partners, the absence of required monitoring systems for customers within Celton Manx’s network services model, and the lack of evidence that the company had properly assessed its own risk exposure related to AML and CTF. 

The Commission also found no record of enhanced due diligence for players identified as higher risk, alongside shortcomings in record-keeping practices and infrequent risk assessments of technology systems.

According to the Commission’s findings, Celton Manx did not consistently test or monitor compliance in the Isle of Man and, on multiple occasions, delayed providing material requested by the Financial Intelligence Unit. 

Additional concerns were raised about the qualifications of the company’s money laundering reporting officer and AML/CTF compliance officer, both of whom the regulator said lacked the expertise required to fulfill their duties under the Code. Training for staff also fell short of legal standards, failing to meet mandated education requirements.

In its response, Celton Manx acknowledged the failures but maintained that its internal inquiries found no evidence of actual money laundering or harm to customers. Due to the nature and extent of the issues, however, the Commission determined that a substantial penalty was warranted. The initial fine stood at £5.6 million ($7.63 million) but was reduced by 30%, to £3.9 million, after the company admitted the breaches and agreed to cooperate fully with the regulator.

“The Code sets out the preventative measures necessary to ensure, to the greatest degree possible, that a gambling operator’s products, systems and services are not exploited for criminal purposes,” the Commission stated. “Any form of material non-compliance with the Code heightens the risk of money laundering, terrorist financing, or proliferation financing occurring.”

In a separate action, the Commission also fined operator SK IOM £70,000 ($95,318) for similar breaches involving compliance monitoring and record-keeping lapses. SK IOM’s penalty was lowered from an initial £100,000 ($136,169) after the company admitted to its shortcomings and worked with the regulator during the investigation.