Grosvenor Casinos Ltd - Important lessons for the gambling industry on anti-money laundering and social responsibility controls
07 September 2015
Grosvenor Casinos Ltd
Rank Digital Gaming (Alderney) Ltd (trading as www.meccabingo.com (opens in new tab))
The Gambling Commission calls on the gambling industry to act on the lessons that have emerged from recent investigations into AML and social responsibility shortcomings in Grosvenor Casinos and meccabingo.com and critically review the effectiveness of their policies and procedures to prevent gambling being used to support crime or risk more formal regulatory action.
The Commission has recently completed an investigation of weaknesses in anti-money laundering (AML) controls at Rank Group’s Grosvenor Casinos (Grosvenor) prompted by the money laundering conviction of a former leading customer, Mr Da Feng Ding.
The Commission has investigated a separate case involving “Customer B”, a Rank meccabingo.com customer who is awaiting sentencing after recently pleading guilty to defrauding a six-figure sum from her employers.
As a result of the investigations, Rank has acknowledged serious shortcomings and failures to apply the lessons learnt from previous scrutiny. The Commission has agreed the operator’s remedial actions including a third party audit of its revised AML arrangements and the surrender of an estimated £950,000 profits that resulted from these shortcomings, to be spent for agreed socially responsible purposes.
Further detail into the background of both cases, the learning for the industry and what remedial action Rank Group has taken can be found in a full public statement on the Commission’s website (opens in new tab).
In the first case the Commission investigated Grosvenor’s handling of its relationship with a Mr Ding, who spent a large volume of cash over a period of approximately three years from 2008 to 2011. The Commission’s findings included that Grosvenor:
- failed to take effective and timely action to verify the identity of the customer
- failed to take a sufficiently robust and risk-based approach in establishing the customer’s source of funds
- failed to take appropriate action when Grosvenor staff had suspicions about the customer’s transactions or when it would have been reasonable for them to have had such suspicions
- failed to take and keep adequate records
- misunderstood its responsibilities in relation to the Proceeds of Crime Act 2002, particularly in relation to the reporting of suspicious activities to law enforcement agencies.
In the second unrelated case, Customer B was able to gamble a six-figure sum without Rank Digital undertaking sufficient AML checks or undertaking adequate monitoring from a social responsibility perspective.
Rank Group is taking the following steps to address the shortcomings identified:
- undertaking a critical review of AML controls within the business, led by an external provider
- disseminating learning from the shortcomings identified through seminars or other forms of direct engagement with other operators
- divesting itself of the gross profits made as a result of the shortcomings, and apply the substantial six-figure sum to agreed socially responsible purposes pay an amount to the Commission to cover the costs of the investigations.
The key messages for the gambling industry relate to:
- monitoring whether appropriate and risk-sensitive policies and procedures relating to the prevention of money laundering and ensuring that people are not exploited or harmed by gambling are being followed effectively
- ensuring that operators manage the risk of money laundering by taking a range of measures, including a consideration of where the money a customer is gambling with comes from
- making sure that money laundering risks relating to established customers are monitored effectively on an ongoing basis
- ensuring that, where there is a suspicion that a customer may be committing money laundering offences, operators take an appropriate range of actions, including both making an appropriate disclosure to law enforcement agencies and reviewing whether to continue with the business relationship with the customer in question
- having a clear understanding on how to manage the risk of “tipping off” customers
- effective record keeping
- misplaced confidence in the effective implementation of policies and procedures.
The Commission is bringing to the attention of all operators the need to take a critical approach to assessing their own policies and procedures and, crucially, whether they are being followed and remain fit for purpose, to avoid generating a false sense of security.
Note to editors
- The Commission’s approach to regulatory sanctions are set out in its published policies, specifically the Statement of principles for licensing and regulation (March 2015) (opens in new tab) and the Licensing, compliance and enforcement under the Gambling Act 2005: policy statement (March 2015) (opens in new tab).
- The Commission's press office can be contacted on (0121) 230 6700 or firstname.lastname@example.org.
For all media enquiries, please contact the Gambling Commission press office.