Greentube Alderney Limited reaches regulatory settlement with the Gambling Commission

On 9 January 2025, the Gambling Commission (the “Commission”) announced that it had reached a regulatory settlement with Greentube Alderney Limited (trading as Admiral Casino) (“Greentube”). As part of the settlement Greentube paid £1m in lieu of a financial penalty.

Following a compliance assessment of the remote operating licence of Greentube, the Commission commenced a regulatory review under s.116 of the Gambling Act 2005. The licence review found Greentube in breach of the Licence Conditions and Codes of Practice (“LCCP”) between September 2022 and June 2023 in respect of social responsibility (“SR”) and anti-money laundering (“AML”) obligations (with some variation in the individual breach periods).

The Commission found that whilst Greentube’s SR and AML policies and procedures themselves were adequate, the breaches resulted from Greentube’s failure to implement and follow its own policies effectively.

Breaches

• AML: Breach of paragraph 3 of Licence Condition (“LC”) 12.1.1
  
  Paragraph 3 of LC 12.1.1 of LCCP requires operators to ensure that money laundering policies, procedures and controls are implemented effectively, kept under review, revised appropriately to ensure they remain effective, and take into account any applicable learning or guidelines published by the Commission.
  
  The Commission found no evidence of money laundering or criminal spend, however it found that on occasion, Greentube did not ensure that its polices, procedures and controls were effectively implemented. Specifically, Greentube did not always:
  • scrutinise available information upon receipt, or in a timely manner, leading to an avoidable delay in the identification and potential escalation of money laundering or terrorist financing risks. For example, a customer’s bank statement, submitted as a proof of address, showing complex and unusual transactions and a negative closing balance was not scrutinised and escalated until the customer reached a financial threshold;
  • fully investigate and escalate accounts showing apparent links to other accounts in a timely manner;
  • follow its policy regarding what it refers to as “risky occupations”: although the operator considered risks posed by the industry in which the customer was employed, occasionally insufficient consideration was given to the risk posed by those who had access to third-party funds (for example, a ‘finance manager’) which could be misappropriated to fund gambling; and
  • follow its recycled winnings policy which specified a time period for accepting “recycled winnings” after which the customer’s source of funds would be requested. It is noteworthy that the Commission did not appear to consider a recycled winnings policy that allowed winnings to be withdrawn and redeposited within a particular time period to be problematic, only that its implementation had not been effective.
• Remote customer interaction: Failure to comply with paragraphs 1 and 8 of Social Responsibility Code Provision (“SRCP”) 3.4.3
  
  Paragraph 1 of SRCP 3.4.3 requires operators to implement effective customer interaction systems and processes in a way that minimises the risk of customers experiencing harms associated with gambling. These systems and processes must embed the three elements of customer interaction – identify, act and evaluate – which reflect that customer interaction is an ongoing process.
  
  The Commission found that, on occasion, Greentube had not ensured that its policies, procedures and controls had been effectively implemented. Specifically, Greentube:
  • failed to fully and effectively implement its policy regarding big/high winners aimed at ensuring customer limits are based on regular, sustainable income rather than one-off or irregular forms of income. For example, one customer, following a withdrawal of significant winnings, was permitted to deposit significant sums for a period greatly in excess to that specified in its policy (despite no evidence provided confirming that the source of the further deposits were the original withdrawn winnings);
  • did not always fully and effectively implement its processes regarding the legitimacy of documents (despite agents receiving training on fraudulent documents, they did not always apply their training); and
  • did not fully and effectively implement its controls to identify indicators of vulnerability/potential harm in a timely manner. For example, one customer supplied a bank statement (as proof of address) that had a negative opening and closing balance and included numerous transactions to another gambling operator. There was no evidence that the bank statement had been considered, and the potential vulnerabilities identified from a SR perspective.

Paragraph 8 of SRCP 3.4.3 requires operators to take appropriate action in a timely manner when they have identified the risk of harm.

The Commission found that, on occasion, Greentube did not take appropriate action in a timely manner when the risk of harm was identified. In some accounts, although risk indicators were present for some customers and a phone interaction was deemed appropriate, the calls were not performed promptly. Instead, they were postponed whilst further monitoring took place or until a further trigger had been hit.

Regulatory settlement

The regulatory settlement reached between Greentube and the Commission consisted of:

• a payment of £1,000,000 in lieu of a financial penalty;
• payment towards the Commission’s investigative costs; and
• agreement to the publication of a statement of facts in relation to the case.

In determining the outcome, the Commission considered the following aggravating factors: (i) the serious nature of the failings and impact on the licensing objectives; (ii) this was the second breach by Greentube (in December 2021 a Commission investigation revealed SR and AML failures); and (iii) the breach arose in circumstances that were similar to previous cases the Commission dealt with which resulted in the publication of lessons learned for the wider industry.

The Commission also recognised the following mitigating factors: (i) Greentube swiftly implemented an action plan to remedy the failings; (ii) it fully cooperated with the investigation; and (iii) it accepted the failings at an appropriately early stage in the investigation.

Lessons Learned

In the context of the enforcement action against Greentube, the Commission’s public statement relating to the review set out a list of questions which operators should consider and use to inform good practice.

Noteworthy points include:

• Operators should set turnaround times for manual reviews, actions, processes, etc and monitor whether those are routinely met.
• Staff should receive adequate initial and refresher training that is recorded and demonstrable.
• Operators should have an effective method to provide feedback, good practice and lessons learned to staff.
• Operators are expected to fully consider the risks associated with customers who may have access to third-party funds which could be misappropriated.
• Operators should fully scrutinise all customer information available in a timely manner, properly assessing and taking steps to mitigate potential AML and SR risks.
• Operators should implement a good system for cross-departmental sharing of information and concerns. For example, ensuring fraud/AML agents alert SR agents if they received a bank statement showing financial vulnerability.
• Operators are expected to act quickly when customers display potential markers of harm, with procedures in place that specify appropriate timescales for actions and interactions.
• If Operators deviate from their policies and procedures, they should be able to justify why and fully document those decisions and the rationale.

Operators should consider these points, as well as good practice points arising out of other enforcement action on an ongoing basis.

Comment

The Commission has demonstrated its commitment to imposing escalated action on repeat offenders of regulatory breaches (Greentube paid £685,000 as a result of its first licence review in 2021, which increased to £1m in the Commission’s second review). The Commission also expects operators to show significant improvements following any previous enforcement action against the operator and others. 

The case underscores the importance of ensuring that SR and AML policies and procedures are implemented effectively. Greentube’s breach was due to a failure to properly implement and follow its own policies rather than any inherent issues with the policies and procedures themselves. Greentube did not always follow its policies including those regarding “risky” occupations, setting customer income limits, and identifying vulnerable behaviour. Notably, the Commission did not object to the recycled winnings policy, which outlined a specific time frame for accepting “recycled winnings”. Instead, the issue arose due to the policy not being adhered to.