NetBet Enterprises Limited has been ordered to pay a £650,000 penalty after an investigation by the UK Gambling Commission (UKGC) discovered anti-money laundering and social responsibility failures.
The operator, which runs netbet.co.uk, will also undergo an independent audit into its operations and will pay the money as part of a settlement with the commission, with all £650,000 going to socially responsible causes.
“This case highlights the serious consequences of failing to meet anti-money laundering and social responsibility obligations,” stated John Pierce, Director of Enforcement at the UKGC.
“We expect all operators to take note and ensure their systems are not only well-designed but are working effectively to protect consumers and to keep crime out of gambling.”
AML failures
Regarding AML, the UKGC noted that failures by NetBet included being over-reliant on financial triggers, with examples of customers being able to spend disproportionately to their net income.
According to the commission’s report, one customer was not referred to the Money Laundering Reporting Officer and remained AML low risk “despite depositing circa £2,000 within four active days, via an e-wallet (Apple Pay), and working in a higher-risk occupation”.
The customer later submitted a pay slip which “showed monthly net pay of circa £2,800, however, disproportionate spend was not considered when the customer deposited £1,650 within a two-hour period”.
The UKGC also discovered examples of “significant gambling activity” where customers were still considered low risk despite demonstrating concerning behaviours.
In addition, the operator’s money laundering and terrorist financing risk assessment also “omitted some key risks, including the management of third-party business relationships, high stakes gambling and controls relating to third-country nationals residing in the UK”.
Exhausted monthly deposit limit in minutes
Regarding social responsibility, the UKGC listed that NetBet’s failures included not implementing effective customer interaction systems and processes to minimise the risk of customers experiencing harm associated with gambling.
NetBet also failed to identify indicators of harm promptly, such as overnight play, velocity of deposits/exhausting limits and escalated gameplay. These indicators were often also only identified after a manual review had taken place.
According to the commission’s report, one customer “routinely exhausted their monthly deposit limit within a few minutes” depositing £15,000 within 40 minutes in one session, then four weeks later £15,500 within two hours.
The customer was also able to “deposit £31,000 in a two-day period at the end of one month (£15,500) and the beginning of the next month (£15,500), because the limits set were per calendar month”.
However, the behaviour was only identified as an indicator of harm after the customer’s account was manually reviewed.
It was noted by the commission that “low-level interventions were occurring, and systems have since been strengthened”.
The UKGC added that inaccurate information was submitted by NetBet when the operator filed its regulatory returns.
“The operator was instructed to take immediate action and make significant improvements to its systems and controls,” Pierce stated.
“This included strengthening their risk assessments, improving how they identify and respond to indicators of harm, and ensuring the accuracy of the data they report to us.”
Action plan
Regarding mitigating factors, the UKGC stated that NetBet had:
- Swiftly put in place an action plan to remedy the failings and provided updates
- Fully cooperated with the investigation and provided information by agreed deadlines
- Accepted the failings at an appropriately early stage in the investigation.
An independent audit of NetBet’s operations will also be carried out to make sure that the improvements being made are effective.
iGaming Expert has reached out to NetBet for comment on the penalty it has received from the UKGC.
Pierce added: “Alongside the £650,000 financial penalty, the operator is also required to commission an independent audit of its policies, procedures, and controls to ensure the necessary improvements they have implemented are properly embedded and remain effective in practice.
“Our focus is on ensuring operators meet the standards we expect, and where they fall short, we will intervene.”
