SkillOnNet was fined £305,150 for regulatory violations

The Gambling Commission of the United Kingdom has fined SkillOnNet £305,150 (€350,351/$378,299) for a variety of anti-money laundering (AML) and social responsibility violations.

SkillOnNet, which operates 50 websites in the United Kingdom, will make the payment in lieu of a monetary penalty after reaching an agreement with the regulator. The monies will be used to support socially acceptable causes.

SkillOnNet failed to comply with various Licence Conditions and Codes of Practise (LCCP) during a regulatory review conducted by the Commission between January 2021 and December 2022.

Core findings included insufficient AML policies, procedures, and controls, as well as inadequacies in SkillOnNet's responsible gambling policies, procedures, controls, and practises, including implementation flaws.

Failures in AML

Specific violations included a violation of licence condition 12.1.1, which requires operators to analyse the risks of their business being utilised for money laundering (ML) and terrorism financing (TF).

According to the authority, the assessment did not take into account payments made by the consumer to unknown or unrelated third parties. The Commission also stated that the evaluation did not adequately address organised crime groups and mule accounts, nor did it take into account information provided by the Commission on the hazards of ML and TF.

The Commission also pointed out a violation of licence condition 12.1.1 (2), which specifies that operators must ensure they have suitable policies, processes, and controls in place to avoid ML and TF after an evaluation.

Concerns raised included a lack of adequate protocols in place to analyse a customer's salary or wealth in order to identify disproportionate spend, as well as a reliance on player declarations to reduce any ML risks.

The Commission also stated that SkillOnNet did not appropriately risk profile customers in terms of AML. When determining disproportionate spending, it also relied on unevidenced verbal comments and monetary criteria.

A second violation was discovered in relation to licence condition 12.1.1(3), which requires licensees to implement and review all measures.

Some users were able to deposit and lose more than double the £2,000 restriction SkillOnNet had in place to reduce the hazards of unverified payment methods. The regulator also stated that the licensee assumed users were recycling wins without gathering any evidence.

The fourth AML failure was connected to licence requirement 12.1.2, which states that operators must follow the Money Laundering, Terrorist Financing, and Transfer of Funds Regulations 2017.

SkillOnNet, according to the Commission, did not take adequate steps to identify and assess the risks of ML and TF, nor did it implement sufficient policies, procedures, and controls.

Failures in social responsibility

SkillOnNet failed to comply with Social Responsibility Code Provision (SRCP) articles 1 and 2, according to the Commission. Licensees are required to interact with clients in order to reduce the risk of gambling damage.

One specific issue highlighted here was the failure to identify clients who demonstrated signs of harm following a win. Due to a technological fault, some players were also able to deposit and gamble big-value bets at quick speeds without safer gambling controls activating.

There was also a failure to identify at-risk customers or those who were disproportionately affected. One player may deposit and lose up to £3,000 each month, which was more than their demonstrated monthly wage.

SkillOnNet also failed to notice night play as a sign of harm, according to the Commission, with one client having a seven-hour session and admitting to being at work at night with his phone on autoplay.

SkillOnNet also failed to communicate with some clients successfully by relying on automated pop-ups.

Furthermore, the Commission found that customer contacts did not adequately reduce the probability of customers encountering gambling-related harms.

One example was a player who deposited £16,000 and lost £3,225 over the course of 41 days. Despite receiving several automated safer gambling popups, emails, and alerts, the individual continued to gamble.

The consumer also participated in a number of safe gaming chats, answering simple questions from the agent, and as a consequence, the customer was able to continue gambling. The Commission stated that these exchanges were brief and that it took the customer's claim at its value without additional investigation or inquiry.

SkillOnNet regulatory settlement information

Following the conclusion of the case, the Commission and SkillOnNet reached a regulatory settlement, which comprised the initial £305,150 payment as well as £9,079 for investigation costs. The operator also committed to publish case information, undertake an independent third-party audit, and implement strengthened anti-money laundering and safer gambling procedures.

The Commission acknowledged that SkillOnNet took steps to correct the violations, responded in a timely way, and cooperated with the investigation. It was also highlighted that the operator acknowledged all of the significant flaws reported.

By fLEXI tEAM