he United Kingdom Gambling Commission (UKGC) is taking regulatory action against EU Lotto, announced the entity on Thursday. The company is set to pay a £760,000 fine ($1 million) and undergo “extensive independent auditing” after a Commission investigation revealed social responsibility and anti-money laundering (AML) failures.
Moreover, EU Lotto, operator of the lottoland.co.uk website, has also received a formal warning for failures that occurred between October 2019 and November 2020, stated the UKGC in a press release. These included neglecting to take into account the Commission’s formal customer interaction guidance.
According to the Commission, EU Lotto failed to take notice of customers frequently changing deposit limits as markers of harm, and showed no evidence of suitable financial and affordability assessments being conducted to identify whether a customer was being harmed or at risk of harm.
Moreover, customer interactions predominately consisted of an email detailing responsible gaming tools available while failing to require a customer response. “There was little evidence of interactions being adapted depending on the extent of potential harm,” valued the UKGC.
In terms of anti-money laundering failures, EU Lotto did not effectively review or analyzed bank statements provided by customers to prove address, and did not restrict customer accounts following source of funds (SoF) request throughout the timeframe previously mentioned.
Further failures include allowing customers to register third-party debit cards (such as those in a different name to the customer to their account), and “relying too heavily” on ineffective threshold triggers and “generally lacking information” regarding how much a customer should be allowed to spend based on income, wealth or any other risk factors.
“This case, like other recent enforcement action, was the result of planned compliance activity,” said Helen Venn, Commission Executive Director. “All operators should be very aware that we will not hesitate to take firm action against those who fail to meet the high standards we expect for consumers in Britain.”
Although publicly announced on Thursday, the decision was taken on September 2, the date on which the investigation concluded. According to the Commission, the licensee co-operated with the UKGC throughout the process and took “corrective steps” to address the identified failings.
According to CEO Nigel Birrell, Lottoland “is fully committed” to ensuring the highest standards of compliance in all of the jurisdictions in which the website operates. Birrell further stated the fine was related to legacy issues around some compliance controls “which have now been addressed.”
“Lottoland has extensive compliance measures in place and we are confident that our current policies and processes meet all relevant standards,” said the CEO. “Remedial action taken included significantly increased investment in our compliance function, more than doubling headcount, alongside a host of other initiatives including bringing in third party support, enhancing training and review of key policies.”
Moreover, Lottoland has committed to building their individual processes “into an automated system to improve the system even further.”
EU Lotto is not the only operator to be fined by the UKGC for social responsibility and money laundering failures these last weeks. In August, Rank's Daub Alderney was fined $8 million also due to a lack of appropriate measures to detect or prevent problem gambling, and ineffective AML and anti-terrorist financing policies.