Court Rejects Daub Alderney Appeal
Author:
Scott Lawson
Daub Alderney’s appeal against a Gambling Commission penalty has been rejected. The online gambling operator appealed the fine, issued over social responsibility and anti-money laundering failures last year, on the basis that it was disproportionate. However, the court sided with the gambling regulator, upholding its ruling.
A number of Daub Alderney’s failures occurred before the business was acquired by Rank. ?Towfiqu Barbhuiya/Pexels
Ruling Upheld
The UK’s Gambling Commission has won a case against online casino operator Daub Alderney. The court rejected the operator’s appeal against a penalty issued by the Gambling Commission last year, upholding the regulator’s ruling. In September 2021 the gambling watchdog fined Daub Alderney ￡5.85 million after uncovering social responsibility and anti-money laundering failures.
Daub Alderney, which runs sites including aspers.com, kittybingo.com and luckypantsbingo.com, went to the First-Tier Tribunal over the fine. It appealed the penalty on the basis that it was excessive, unfair and disproportionate. However, Judge Findlay dismissed the appeal, describing the financial penalty as a ‘fair and reasonable regulatory response. She stated:
“I find that there were serious breaches which were similar to the breaches for which a substantial financial penalty was imposed in 2018 and there are no new facts which persuade me that the decision was wrong. I find that the (Commission Regulatory) Panel did not err in law and complied with its statutory obligations.”
The 2018 fine that Judge Findlay referred to saw Daub Alderney fined ￡7.1 million over failures relating to rules on money laundering and the protection of vulnerable customers. An investigation carried out by the regulator found that the operator had repeatedly failed to keep adequate records of customer financial transactions, monitor player interactions appropriately and carry out required due diligence checks.
Shortcomings were also apparent in the operator’s risk management and AML infrastructure, as well as staff training on monitoring financial transactions. The investigation came as part of what the regulator described at the time as an ongoing investigation into the online casino sector. The enforcement action against Daub Alderney also saw extra conditions imposed on its license.
Speaking on behalf of the Gambling Commission, Deputy CEO Sarah Gardner welcomed the First-Tier Tribunal’s decision to dismiss the appeal. She added that the regulator does not take the decision to penalize gambling operators lightly, but is obliged to take decisive action against those that flout rules designed to make gambling safe and free from crime.
Under New Ownership
Daub Alderney’s 2021 penalty over social responsibility and anti-money laundering failures came after the operator neglected to implement policies and procedures for customer interaction in cases where the activity of customers could indicate problem gambling. It was also given an official warning over the failures that occurred between January 2019 and March 2020.
In a press release issued at the time, the regulator highlighted a number of examples of instances in which Daub Alderney had failed its customers. One customer was able to lose ￡43,410 in four months despite showing signs of problem gambling, including using four different payment cards in one day and reversing ￡133,873 in requested withdrawals.
Another customer lost ￡40,500 in a month but was sent just two safer gambling messages and a pop up. Neither of these were evaluated for effectiveness. A third customer lost ￡39,000 in three and a half months and received only one safer gambling message and two pop ups.
Daub Alderney’s controls to prevent money laundering and terrorist financing were also found to be lacking. One customer was allowed to deposit ￡50,000 before being asked for source of funds evidence. Another deposited ￡41,500 in a month without supplying source of funds evidence. A third customer, who lost ￡53,000 over eight months, only gave source of funds showing that they lived in a house estimated to be worth ￡233,000.
The Commission took the opportunity to make an example of Daub Alderney, warning that it would continue to take firm action against those that fail to raise standards. The regulator recognized that a significant portion of these failures occurred before Rank took control of the business in October 2019 and that some improvements had been made since the acquisition.
However, the passing of its shares from one set of investors to another did not mitigate the operator’s shortcomings as a license holder. The Gambling Commission warned that all operators would face the full consequences of their regulatory failures even if breaches occurred prior to ownership.
Tweet Apology
Earlier this month, the Gambling Commission was forced to issue an apology after a tweet it posted was criticized as inappropriate. Before England’s World Cup match against France, which saw the three lions knocked out of the competition, the regulator encouraged bettors to use its online register to check that they were using licensed bookmakers.
The tweet, which was viewed over 20,000 times, featured a gif of England football supporters with children wearing national team face paint. The Commission has since issued a public apology for the tweet and deleted the post. In its apology, it acknowledged that including the image of a child undermined its consumer protection message.
The legal age for gambling in the UK is eighteen and above, so the Commission’s tweet had significant potential for controversy. Links between the betting industry and young people have been a topic under discussion during the government’s Gambling Act Review, which is expected to be concluded in a matter of weeks.
Campaigners have called for reforms regarding how gambling is advertised on television. Front of shirt football sponsorship deals have also come under scrutiny, due to the exposure of gambling brands to children and vulnerable people.
Operators are subject to regulatory action if they market their products to children, be it intentionally or unintentionally. In September online bookmaker Betway was fined ￡400,000 after its brand was promoted in the children’s section of West Ham United FC’s website. Betway has acted as the Premier League football club’s principal partner since 2015.
