Videoslots will pay a £650,000 fine after the Gambling Commission (GC) uncovered social responsibility and anti-money laundering (AML) failures at the operator.
The licensee, which runs the Videoslots, MrVegas and MegaRiches brands in the UK, will also undergo a third-party audit of its systems as part of the GC’s decision.
On the social responsibility failings, the regulator ruled that the systems in place “did not effectively monitor customer activity to identify harm or potential harm”.
This included setting a monthly deposit limit for players, as the operator’s limits ran across a calendar month and did not include the initial deposit.
In turn, this meant one customer lost £5,000 in a month despite having a £3,000 monthly deposit limit.
Other examples included one player losing £5,000 in 24 hours despite a £3,000 limit, and another user losing £7,500 in 18 days even though they had a £2,000 deposit limit.
Additionally, the GC noted that one player did not receive any interaction from Videoslots after they lost £6,550 across three active playing days in a two-month period.
In terms of AML shortcomings, the regulator said there were “gaps in associated policies and procedures, record management omissions and an over-reliance on an algorithm”.
The GC added this meant one player funded their account over a 16-day period with pre-payment vouchers totalling more than £75,000.
After gambling, the player transferred proceeds to four different bank accounts, with the player found to be accessing their Videoslots account from outside of the UK.
The GC said the customer’s automated AML risk score did not trigger a source of funds request from the operator in a “timely manner”.
The regulator added: “One of the key failures was that the automated scoring system in place at the time did not identify the activity as high risk, and there was a presumption that the activity was funded from recycled winnings without any supporting evidence to explain why the customer was adopting such a complex and unnecessary deposit and withdrawal pattern.”
The shortcomings were found between October 2023 and February 2024.
“The licensee co-operated with the commission throughout the investigation, and took immediate steps to remedy the issues identified,” the GC confirmed.
John Pierce, GC director of enforcement, said: “Open-loop payment systems are high risk in nature because they could enable anonymous deposits and make it harder to trace funds.
“In this case, the licensee failed to implement timely customer interactions and did not conduct enhanced customer due diligence until the customer had reached significant spend thresholds – such failings are unacceptable.
“Operators must review how open-loop payment systems such as prepaid digital vouchers are managed in a gambling environment because they are high risk and present operational challenges in terms of effective monitoring.”
The Videoslots response
In response to the ruling, Alexander Stevendahl, Videoslots CEO, remarked: “To clarify one example mentioned in the statement: the GC states that we breached customer deposit limits. This is not accurate.
“No customer exceeded their self-set deposit limit. What we had in place were internal thresholds intended to prompt enhanced checks before a customer approached their limit.
“For instance, a customer sets a £2,000 deposit limit. Based on our internal assessments, we decided that if the customer deposited more than £500, we would temporarily pause further deposits while carrying out deeper checks.
“If the customer deposited £1,000, this internal threshold would trigger, and we would stop additional deposits while we completed our review. The customer remained well below their actual limit throughout.
“The GC preferred a different approach, which we fully understand, and we have updated our processes accordingly. However, presenting this as a breach of customer limits may cause unnecessary confusion.
“Another case referenced in the statement relates to an issue we had already identified and reported proactively as a key event before the assessment began. We recognised a weakness, escalated it and addressed it.
“If the regulator wishes to share this publicly, we respect that, but including the surrounding context would help provide a more accurate picture of how the matter arose and how it was handled.
“We remain committed to cooperating openly with regulators and maintaining high standards across our operations. A shared understanding of the facts is important for a strong and sustainable regulated industry, and we will continue working toward that together.”
The post Videoslots fined £650,000 over AML and social responsibility failings first appeared on EGR Intel.
Gambling Commission rules that monitoring systems were ineffective, allowing one player to use pre-payment vouchers to deposit more than £75,000
The post Videoslots fined £650,000 over AML and social responsibility failings first appeared on EGR Intel.