UKGC fines Videoslots £650,000 over AML and safer gambling failures

• The UK Gambling Commission has fined Videoslots Limited £650,000 after uncovering anti-money laundering and social responsibility breaches.
• Failures included ineffective deposit limits and inadequate monitoring of high-risk customer transactions.
• Videoslots Limited must undergo a third-party audit to improve its compliance with AML and safer gambling requirements.

The UK Gambling Commission has fined Videoslots Limited £650,000 following an investigation that revealed shortcomings in its anti-money laundering (AML) controls and social responsibility systems.

The operator is required to complete an independent audit and address the failures identified in its monitoring of customer activity and transaction risks, says the UK gambling regulator in its official release.

Videoslots Limited operates videoslots.co.uk, mrvegas.com and megariches.com in the UK.

Players exceeding limits

The investigation found that Videoslots Limited’s automated systems set monthly deposit limits for customers, but these limits did not account for initial deposits, enabling some players to exceed their limits.

One customer lost £5,000 in a calendar month despite a £3,000 deposit cap. Another lost £5,000 within 24 hours under the same limit, while a third lost £7,500 over eighteen days despite a £2,000 limit.

The Commission also highlighted the operator’s ineffective monitoring of customers’ gambling behaviour and the failure to intervene when signs of potential harm appeared. For example, one player lost £6,550 over just three active days across two months without any operator interaction.

AML concerns and payment method risks

Videoslots’ AML and counter-terrorist financing controls were found to be insufficient. The firm over-relied on algorithms that failed to flag suspicious activity, including detecting a customer who deposited more than £75,000 using digital pre-payment vouchers in sixteen days.

This customer also transferred gambling proceeds to four bank accounts and accessed the site from outside Great Britain at times.

The operator did not escalate or properly investigate risk factors in several cases. Assumptions were made about funds being recycled winnings without concrete verification, contributing to inadequate oversight.

UKGC’s statement

John Pierce, Director of Enforcement at the Commission, commented on the situation:

“Operators are required to have effective Social Responsibility and Anti-Money Laundering policies, procedures and controls as a condition of holding an operating licence.

“In this case, the operator’s monthly deposit limits were found to be ineffective when tested in practice and AML controls were not applied to the standards we expect.”

Pierce explained that the investigation revealed a serious instance where prepaid digital vouchers were used for gambling without proper oversight or timely intervention.

“The over-reliance on an algorithm to monitor risk meant that the customer was able to carry out a high volume of deposits and transfer the proceeds of gambling to multiple different destination accounts with insufficient and timely checks or robust source of funds verification taking place,” Pierce said.

Third-party audit underway

Videoslots Limited must now undergo a third-party audit to evaluate the effectiveness of its AML and safer gambling measures. The Commission will closely monitor compliance improvements.

It has also advised all licence holders to consider risks associated with digital payment schemes like prepaid vouchers and enhanced scrutiny on emerging AML threats.

Source: GamblingCommission.gov.uk