888 fined £9.4m over social responsibility and money laundering

Great Britain’s Gambling Commission has issued 888 with a fine of £9.4m (€11.3m/$12.6m) over a series of social responsibility and money laundering failings, including setting its deposit threshold for financial checks at £40,000.

Upon handing down the fine, Commission chief executive Andrew Rhodes warned that if similar failings happen again, the regulator may have to “seriously consider the suitability of the operator” to fulfill its responsibilities as a licensee.

Following a review of 888’s operating licence, the Commission said it identified a number of breaches.

Specific breaches included licence condition 12.1.1, which covers the prevention of money laundering and terrorist financing, and licence condition 12.1.2, in relation to measures for operators based in foreign jurisdictions.

888 also failed to comply with social responsibility code provision (SRCP) 3.4.1 related to customer interaction, as well as SRCP 3.9.1 for the remote identification of individual customers.

Setting out some of these failings, the Commission said issues related to social responsibility included failing to identify those at risk of harm because its policies determined affordability checks should be carried out after deposits reach £40,000.

888 was also found to have not carried out a customer interaction with a player who lost £37,000 in six weeks during the novel coronavirus (Covid-19) pandemic. In a separate case, the operator also allowed an NHS worker that earned £1,400 a month to set a monthly deposit cap of £1,300.

The Commission also noted how most customer interactions consisted of an email pointing out the responsible gambling tools available and did not require a response from the player, while the regulator said it did not find any evidence of 888 operator proactively placing restrictions on accounts where social responsibility concerns were raised.

Another social responsibility failing included that 888 did not ensure if a player had multiple accounts, those accounts were managed for customer interaction holistically, with financial limits implemented across all accounts if required. An example of this was that a customer had one of his 11 accounts restricted because of source-of-funds concerns but was still allowed to not only continue gambling but also open three more.

In terms of money laundering failures, the Commission again mentioned 888’s £40,000 threshold.

888 also accepted verbal assurances from customers to confirm their income and relied on open-source information to validate sources of funds, while the operator failed to set out which documents should be requested as part of its checks.

Noting a specific failing, the regulator said that one customer was allowed to spend £65,835 in just five months without source-of-funds checks being carried out.

The Commission also noted that 888 did not effectively implement its own policies, which stated customers had 10 days to present source-of-funds documentation before restrictions would be placed on their account. In one case, these documents were not requested until three weeks after the 10-day trigger. The player lost £15,000 during those three weeks.

Ruling on the case, the Commission imposed a warning under the Gambling Act 2005 and attached additional conditions to 888’s operating licence.

These conditions require 888 to conduct a third-party audit within 12 months of the review to examine whether it is effectively implementing its anti-money laundering and social responsibility policies, procedures and controls

The Commission also imposed a financial penalty of £9.4m.

Gambling Commission chief executive Andrew Rhodes noted that this is the second time 888 faced enforcement action. In 2017, 888 was ordered to pay a £7.8m penalty package for failing vulnerable customers.

“The circumstances of the last enforcement action may be different but both cases involve failing consumers – and this is something that is not acceptable,” Rhodes said.

“Today’s fine is one of our largest to date, and all should be clear that if there is a repeat of the failures at 888 then we have to seriously consider the suitability of the operator to uphold the licensing objectives and keep gambling safe and crime-free.

“Consumers in Britain deserve to know that when they gamble, they are participating in a leisure activity where operators play their part in keeping them safe and are carrying out checks to ensure money is crime-free.”

Responding to the ruling, 888 accepted the decision and said that since the compliance assessment concluded in October 2020, it took “immediate and appropriate” action to improve its internal policies and procedures

Actions included Implementing additional customer source of funds checks and loss limits, reducing the thresholds in its customer behaviour monitoring technology that trigger alerts and customer interactions, investing in safer gambling and compliance team, and also strengthening and developing its assessment of anti-money laundering risks facing the business.

“We recognise our responsibility to make gambling safer and regret that previous implementation of our processes failed to meet required standards in the UK,” 888 chief executive Itai Pazner said. “We accept the findings of the investigation of some of 888’s former policies and procedures and have taken immediate appropriate action to improve and address the failings.”

In addition, 888 said it had initiated a number of other safer gambling initiatives including the launch of Control Centre, a customer-focused interface that enables customers to monitor their gambling activity through, real-time data, and the establishment of a new ESG committee of the board.

“Over recent years we have made significant investments in safer gambling, including more than doubling the size of our compliance team since 2019,” Pazner added. “We will continue to work closely with the Commission, our peers and other stakeholders to drive continuous improvement in the industry.

“We continue to prioritise safer gambling by investing in technology as a force for good, giving customers transparency about their activity and using sophisticated AI to detect and block harmful play. We know that our work in this area must be ongoing, and we remain committed to continuing investment in meeting our safer gambling objectives.”