Videoslots Limited receives £650,000 Gambling Commission fine

Videoslots Limited, an online casino based in Malta, has received a £650,000 ($849,000) fine from the Gambling Commission (GC).

The company has also been issued with a warning for what the GC deemed significant licence-breaches concerning anti-money laundering (AML) procedures and social responsibility failures.

Videoslots Limited runs three sites including: videoslots.co.uk, mrvegas.com and megariches.com, and going forward, it will have to submit to a third-party audit process in order to make certain it has made the requisite improvements.

Certain system failings were cited as being partially responsible for failing to identify and monitor situations where customers were exhibiting signs of harms and overspend.

An investigation discovered that the monitoring system set a monthly deposit limit that didn't include the customer's initial deposit - this resulted in one player losing £5,000 in a month, defying their £3,000 deposit.

An even bigger disparity was found with a player who lost £7,500 across 18 days despite having a £2,000 monthly limit.

On the AML side, gaps were uncovered in record-keeping and procedures, with the operator found to be too reliant on algorithms identifying any abnormalities.

One account was funded through various digital pre-payment vouchers in excess of £75,000, and after some activity, noted as taking place outside of Great Britain, the money was withdrawn to four different accounts.

According to GC best-practice with AML procedures, this should have flagged as an issue and caused some operator-customer interaction to take place.

John Pierce, Commission Director of Enforcement at the GC, said: "The investigation identified a serious example where pre-paid digital vouchers had been used for gambling without effective oversight and early intervention."

He was also keen to make a point to operators about open-loop payment systems, warning that they 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.