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Malta-based white label iGaming supplier SkillOnNet Limited has been ordered to pay £305,150 by the UK Gambling Commission for social responsibility and AML failures.

Background info

SkillOnNet runs 50 separate operator websites in the UK, for companies including Genting, PlayOJO and Metal Casino, among others.

During a regulatory review carried out by the UKGC between January 2021 and December 2022, the company was found to be in breach of several different regulatory requirements relating to the prevention of money laundering and terrorist financing, as well as the prevention of customers from experiencing gambling harms.

Following the conclusion of the review, the Commission has ordered SkillOnNet to make a payment in lieu of a financial penalty totalling £305,150, including a £105,650 divestment, as well as conducting an independent third-party audit to ensure the effective implementation of AML and safer gambling procedures.

AML failures

SkillOnNet accepted that it was in breach of AML-related licence conditions between May 2021 and December 2022, as its money laundering and terrorist financing risk assessments did not sufficiently reflect the Gambling Commission’s expectations or take into account the regulator’s ML/TF risk assessment of the British gambling industry.

The company failed to appropriately consider payments received from unknown or unassociated third parties of customers, appropriately consider organised crime groups and ‘mule’ accounts, or adequately take into consideration information on money laundering and terrorist financing risks provided to it by the UKGC.

SkillOnNet was also found to have relied on customers’ own declarations to provide proof of source of funds and therefore mitigate money laundering risks, and was considered to have failed in effectively risk profiling its customers.

It also failed to require a nominated officer to provide an annual report covering the operation and effectiveness of its AML systems and controls.

In addition, customers were allowed to deposit and lose more than double the £2,000 limit the company had in place to mitigate the risks of unverified payment methods, while previously won and withdrawn funds were accepted as evidence of available funds for gambling up to 30 days after withdrawals had taken place.

The business “made assumptions that customers were recycling winnings without obtaining any evidence from the customer to support that assertion,” the UKGC said.

Social responsibility failures

In addition to its AML and terrorist financing failures, SkillOnNet also failed on several counts of social responsibility and customer protection.

All UK licensees are required to interact with customers in a way which minimises the risk of experiencing gambling harms.

The UKGC said SkillOnNet failed to identify customers displaying markers of harm following a win, such as an increase in sessions and stakes.

Customers were also able to deposit and place high value bets at high speed without effective safer gambling controls activating due to a technical issue.

Further, SkillOnNet failed to identify customers spending disproportionately, for example one customer who was able to deposit and lose up to £3,000 per month, despite that being more than their evidenced monthly salary.

Another customer was able to deposit £16,000 and lose £3,225 over 41 days. After receiving multiple automated safer gambling pop-ups and emails, the customer also had a number of safer gambling chats and provided basic information to the company, after which they were allowed to continue gambling.

The UKGC deemed that the interactions were not effective in identifying whether or not the customer was at risk.

The company also failed to recognise night play as a marker of harm, and failed to effectively interact with some customers by relying too much on automated pop-ups.

Commenting on the UKGC’s decision on LinkedIn, Northridge Law LLP partner Melanie Ellis said: “The example customer identified in the section on safer gambling failings is worth noting as the figures are relatively low compared to other cases and the operator did conduct interactions.”

Ellis also suggested that the ruling showed the Gambling Commission has already begun implementing one of the major changes introduced as part of the Gambling Act review, which recommended that detailed financial checks should be triggered by a net loss of £2,000 within 90 days.

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