UKGC Fines 32Red with a Massive $2.6 Million Penalty

Publish: 09.07.2018

Online casino company 32Red will have to pay a hefty $2.65 million fine after the United Kingdom Gambling Commission issued a penalty for failing to protect a customer who deposited a little over $1 million over a period of two and a half years.

32Red had failed to check the customer, who had a net income of around $2,850 per month, could afford the wagers despite the fact that regulatory rulings in this area required the company to do so.

A Lesson to be Learnt

According to an investigation conducted by the UKGC, 32Red failed to demonstrate social responsibility in this case. The investigation covered the period from November 2014, when 32Red was licensed by the Commission, until April last year.

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It has been revealed that no money laundering checks have been made regarding this player’s deposits, although it was more than evident he was a problem player. Moreover, at least 22 incidents occurred during this period, which should have been sufficient enough for 32Red to act.

But instead of actually doing something, 32Red awarded free bonuses to the player, who even received a VIP status in 2013. However, since the firm received their license in 2014, the investigation focused only on that time frame.

Commenting on the results of the investigation, Richard Watson, the Commission’s Executive Director said that 32Red had encouraged the customer to gamble more instead of checking on his welfare. Watson pointed out the company had done the exact opposite of what they were supposed to be doing, although it was obvious the customer was displaying problem gambling behaviour.

Operators Need to Act ASAP

He stated that operators needed to take action whenever they spotted signs of problem gambling and added they should be carefully reviewing all the customers they were having a high level of contact with.

Watson stressed that consumers from gambling-related harm was a priority for the UKGC and once again pointed out that they would take tough actions where they noticed operators failing in their responsibility to keep their customers safe.

The penalty represents a package of fines, which includes:

  • around $940,000 divestment of the financial gain,
  • a penalty of $1.7 million
  • nearly $20,000 to be paid towards the costs of investigation
  • improvements to firm’s policies and procedures

32Red admitted they had made breaches, while they further promised to introduce a set of measures aimed at improving the company’s processes and procedures. According to a statement, some of these changes were applied as soon as the incident was revealed, while others will come into effect in the coming period.

It is also revealed that an independent third-party audit of the firm’s Anti-Money Laundering/Counter-Terrorist Financing (AML/CTF) would be conducted to see if they were in line with accepted and implemented the recommendation.

The set of measure includes the adoption of Kindred’s “player safety-early detection system”, enabling better detection of problem gamblers and faster, better quality interactions.

Kindred, formerly known as Unibet, acquired 32Red last year in a deal worth $219.

Founded in 2002, 32Red today operates 32Red Poker Room, 32Red Bingo, 32Red Sport and multiple brands including Roxy Palace, purchased back in 2015.

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