The United Kingdom Gambling Commission (UKGC) has fined gaming company 32Red more than £2 million for failing to properly implement problem gambling and money laundering controls. The issues stem from a player who both deposited much more money than he could afford but also showed problem gambling behaviors on nearly two dozen occasions.
Player’s Communications to 32Red Should Have Sounded Alarm Bells
The UKGC said that the customer started at 32Red in September 2011 and achieved VIP status in February 2013, but it is the time from November 2014, when UKGC began licensing 32Red, that is of concern. From that point, the customer contacted 32Red 22 times in a way that would normally indicate possible problem gambling, but was just given bonuses:
From November 2014, there were 22 incidences where Customer A referred to issues or made complaints which could indicate problems with gambling. There had been many more prior to this too, which should have fed into a developing picture of the customer. The incidences should have led to a customer interaction, but instead they were each met with a bonus being applied to the account. There were three distinct types of contact:
poor performance – eg “I have had enough of the site not performing well”
spending too much – eg “I’ve deposited quite a sum”
frustrated, fed up, chasing losses – eg “all I seem to do is deposit”.
Yikes.
Player’s Income Much Smaller Than Deposits
Also during that time, the customer gambled in a way befitting a whale; combined with the other problem gambling signs, this should have been another tip-off to 32Red, but the company did little about it.
It wasn’t until January 2017 that 32Red reviewed the account because of an odd pattern of play in which the customer had a seven-figure win and then immediately put that money back into play. Most normal gamblers would cash out most of it (I know I would). At that point, the customer had deposited £500,000 since November 2014.
The site requested proof of income from the customer, but didn’t receive it for five weeks, all the while letting the customer keep playing. Then, even after the documentation showed that the customer couldn’t support those kinds of deposits, 32RED still let him keep playing until finally cutting him off in April 2017. By that time, he had deposited £758,000 since November 2014 (again, this person had been a customer for three years before that).
The UKGC explained how poor of a job 32Red in verifying the customer’s income:
The material supplied – a payslip and report of commission for work – was not credible and showed volatility in receipted income. To take it at face value though would suggest a monthly net income of £13,000, yet average monthly deposits were in excess of £45,000. Simple open source checks which could have been indicators of the customer’s source of wealth were not performed – eg searching typical salaries for the occupation, searching Google maps on the home address. In fact, the customer’s average monthly net salary was £2,150.
The penalty imposed by the UKGC includes £709,046 “divestment of the financial gain,” £1.3 million to “be spent on accelerating delivery of the National Responsible Gambling Strategy,” and £15,000 in investigation costs.