Videoslots Limited Fined £2 Million for Regulatory Failures

Videoslots Limited Fined £2 Million

15 June 2023

Videoslots Limited, the operator of popular online gaming platforms videoslots.com, videoslots.co.uk, and mrvegas.com, has been fined £2 million by the Gambling Commission. This follows a series of significant social responsibility and anti-money laundering failures that were discovered during a recent investigation by the Commission.

The social responsibility failures unearthed by the Commission included a lack of early identification of customers displaying risky gambling behaviour. The company was found to have not ensured that gamblers showing signs of potential harm were identified promptly. Their responsible gambling procedures, designed to catch and address these signs, were not conducted as efficiently or effectively as they should have been.

Furthermore, Videoslots Limited was also found guilty of failing to evaluate whether the amounts being deposited or lost by a customer were appropriate, thereby neglecting to identify whether a customer was at risk of experiencing harm. The operator also allowed customers showing signs of gambling-related harm to continue gambling significant amounts even after interactions, despite a continued pattern of harmful behaviour.

The investigation by the Commission also found severe Anti-Money Laundering (AML) breaches. Videoslots Limited was found not to have implemented its own risk-based processes effectively, leading to significant delays in required actions such as AML reviews and requests for source of funds

The company also failed to fulfil elements of customer due diligence promptly in accordance with its own risk-based approach. Additionally, it was uncovered that the operator did not have enough AML analysts to adequately process the volumes of data or conduct the AML account reviews in line with its procedures.

The full £2 million penalty, agreed as part of a settlement with the Commission, will be directed towards socially responsible causes. More details about the company's failings and the subsequent penalty can be found in the public statement released by the Gambling Commission, which we have covered below. 

Public Statement

In an official public statement, the UK Gambling Commission revealed severe failings in the responsible gambling practices and Anti-Money Laundering (AML) policies of online casino operator Videoslots Limited. The announcement was made public on June 15, 2023, resulting from a regulatory review of the company's practices from October 2019 to February 2022.

The commission's inquiry found significant deficiencies in the implementation of Videoslots' processes, aimed at preventing money laundering and ensuring safer gambling. The operator's non-compliance with specific Licence Conditions and Codes of Practice (LCCP) led to a financial penalty of £2 million.

The investigation outlined a series of breaches, notably including failure to comply with licence condition 12.1.1(3), which requires licensees to implement effective AML policies, procedures, and controls. Videoslots' breaches occurred between March 2021 and April 2022 due to several reasons, including delays in performing critical actions, failure to fulfil elements of customer due diligence timely, and not having sufficient AML analysts to process the volumes of data.

The report also found that Videoslots failed to comply with the Social Responsibility Code Provision (SRCP) 3.4.1 on customer interaction. In some instances, Videoslots did not ensure that customers displaying risk behaviours were appropriately identified and did not use restrictive measures such as forced deposit limits and playblocks as regularly as necessary.

The operator also failed to identify whether a customer was at risk of experiencing harm by not considering whether the amount being deposited or lost was appropriate. The report noted cases where customers with self-declared income and savings were able to deposit and lose amounts significantly higher than their savings and estimated earnings combined. This revealed a lack of due diligence in understanding customers' financial capacity.

In some instances, customers continued to gamble significant amounts even after interactions with the company, despite their harmful behaviour persisting. It demonstrated that Videoslots' approach to interactions, as laid out in their responsible gambling policy and procedures, was not implemented effectively. 

The extensive review and findings underscore the importance of maintaining robust and effective responsible gambling and AML policies, especially within the digital gambling industry. Videoslots Limited's failure to adhere to these critical regulations resulted in hefty financial penalties and public exposure of its regulatory shortcomings. 

The UK Gambling Commission's enforcement action serves as a stark reminder for all licensed operators (including fast withdrawal casinos) to ensure they are conducting business in a manner that prioritises the safety and wellbeing of their customers. The repercussions of Videoslots Limited are expected to be a cautionary tale for other operators to maintain compliance with all gambling regulations and laws.

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