Blue Star Planet faces £620,000 regulatory action
16 February 2023
Blue Star Planet Limited, trading as 10Bet, will pay £620,000 after a Commission investigation revealed social responsibility and anti-money laundering failures.
The operator – which runs 10bet.co.uk – will pay the money as part of a settlement with the Commission.
All £620,000 will go to socially responsible causes.
More details of the failings can be read in the public statement.UK Gambling Commission Press Release
And the public statement:
Blue Star Planet Limited Public Statement
16 February 2023Search or save this guide
Operators are expected to consider the issues outlined above and review their own practices to identify and implement improvements in respect of the management of customers’ accounts.
Licensed gambling operators have a legal duty to ensure their gambling facilities are provided in compliance with the Gambling Act 2005 (opens in new tab)(the Act), the conditions of their licence and in accordance with the licensing objectives, which are to:
- prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime
- ensure that gambling is conducted in a fair, safe and open way
- protect children and other vulnerable people from being harmed or exploited by gambling.
Blue Star Planet Limited Executive Summary
This investigation resulted in the commencement of a section 116 regulatory review1 of Blue Star Planet Limited, Combined Remote Operating Licence Number: 000-043173-R-322899-020.
The regulatory review found failings in Blue Star Planet Limited’s processes which were aimed at preventing Money Laundering (ML) and protecting vulnerable people. These failings were identified following a compliance assessment that was conducted by Commission Officials on 22, 23, 24 and 25 June 2021.
Between November 2019 and June 2021, Blue Star Planet Limited failed to comply with the following Licence Conditions and Codes of Practice (LCCP):
- paragraphs 1, 2 and 3 of licence condition 12.1.1, requiring compliance with the prevention of money laundering and terrorist financing
- licence condition 12.1.2 requiring operators based in foreign jurisdictions to comply with the Money Laundering, Terrorist Financing and Transfer of Funds (Information of the Payer) Regulations 2017 (the 2017 Regulations)
- paragraph 1a of licence condition 8.1.1, requiring licensees providing facilities for remote gambling to display on every screen from which customers are able to access gambling facilities provided in reliance on this licence a statement that they are licensed and regulated by the Gambling Commission
- paragraphs 1b, 1c and 2 of Social Responsibility Code Provision (SRCP) 3.4.1, requiring licensees to interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling, and to take into account the Commission’s guidance on customer interaction.
Considering remedial action taken by Blue Star Planet Limited and in line with our Statement of principles for licensing and regulation, Blue Star Planet Limited will pay a total of £620,000 in lieu of a financial penalty.
Blue Star Planet Limited Findings
The investigation and our subsequent regulatory review found:
- failings in Blue Star Planet Limited’s implementation of Anti-Money Laundering (AML) policies, procedures and controls
- deficiencies in its responsible gambling policies, procedures, controls and practices, including weaknesses in implementation
- weaknesses in its reporting arrangements.
We found that between November 2019 and June 2021, Blue Star Planet Limited had been in:
Breach of paragraph 1 of license condition 12.1.1
Licence condition 12.1.1(1) states: “Licensees must conduct an assessment of the risks of their business being used for money laundering and terrorist financing. Such risk assessment must be appropriate and must be reviewed as necessary in the light of any changes of circumstances, including the introduction of new products or technology, new methods of payment by customers, changes in the customer demographic or any other material changes, and in any event reviewed at least annually.”
Blue Star Planet Limited accepted its AML Risk Assessment (the Risk Assessment) was inadequate in certain areas and did not explicitly acknowledge:
- certain high-risk factors deemed by the Commission to be relevant under Regulation 33 of the 2017 Regulations(opens in new tab)
- certain customer risks specifically mentioned at paragraph 2.22 of theCommission’s guidance on anti-money laundering (opens in new tab) ‘The prevention of money laundering and combating the financing of terrorism – Guidance for remote and non-remote casinos’ (AML Guidance).
Breach of paragraph 2 of license condition 12.1.1
Licence condition 12.1.1(2) states: “Following completion of and having regard to the risk assessment, and any review of the assessment, licensees must ensure they have appropriate policies, procedures and controls to prevent money laundering and terrorist financing.”
Blue Star Planet Limited accepted that at the time of the Assessment:
- the financial controls in place to automatically limit the amount customers could deposit were too high and that, as a consequence, its policies and procedures were not implemented effectively or appropriately in accordance with licence condition 12.1.1(2)
- the financial limits put in place to control how much more a customer could deposit and gamble after reaching an AML risk alert, and before satisfactory risk profiling could take place, were set too high
- some customers were permitted to deposit significant amounts of money (up to the cumulative deposit limit) in a short period of time before satisfactory risk profiling (and any manual restrictions) could occur.
Breach of paragraph 3 of licence condition 12.1.1
Licence condition 12.1.1(3) states “Licensees must ensure that such policies, procedures and controls are implemented effectively, kept under review, revised appropriately to ensure that they remain effective, and take into account any applicable learning or guidelines published by the Gambling Commission from time to time.”
Blue Star Planet Limited accepted that, at the time of the Assessment:
- some customers were able to gamble at high velocity before automated restrictions were applied to the customer’s account
- there were instances where SoF evidence should have been requested from some customers at an earlier stage in the business relationship
- some of its customers who had received an interaction should have been restricted from further play due to ML / TF risks that were presented
- the financial deposit limits were too high and, as a result, were not effective in controlling high velocity spend and permitted some customers to exceed AML risk thresholds that were in place.
Breach of paragraph 1 of licence condition 12.1.2 (Anti-Money Laundering Measures for operators based in foreign jurisdictions)
Paragraph 1 of this condition has been in place since October 2016 and requires that: “Licensees must comply with Parts 2 and 3 of the Money Laundering Regulations 2007 (UK Statutory Instrument No. 2157 of 2007) as amended by the Money Laundering (Amendment) Regulations 2007 (UK Statutory Instrument No. 3299 of 2007), or the equivalent requirements of any UK Statutory Instrument by which those regulations are amended or superseded insofar as they relate to casinos (the MLR) whether or not the MLR otherwise apply to their business”.
Blue Star Planet Limited accepted:
- it was in breach of licence condition 12.1.2 on the basis of the conditions detailed at sections 1 to 3.
Breach of licence condition 8.1.1 (Display of Licensed Status)2
Licence condition 8.1.1 states:
“1 Licensees providing facilities for remote gambling must display on every screen from which customers are able to access gambling facilities provided in reliance on this licence:
- a. a statement that they are licensed and regulated by the Gambling Commission.
- b. their account number.
- c. a link (which will be supplied by the Commission) to their current licensed status as recorded on the Commission’s website.
2 Such statement, account number and link must be in the format, provided by the means, and contain the information from time to time specified by the Commission in its technical standards applicable to the kind of facilities for gambling provided in accordance with this licence or otherwise notified to licensees for the purposes of this condition.
3 Licensees may also display on screens accessible from Great Britain information about licences or other permissions they hold from regulators in, or by virtue of the laws of, jurisdictions outside Great Britain provided it is made plain on those screens that the licensee provides facilities for gambling to persons in Great Britain in reliance on their Gambling Commission licence(s).”
Blue Star Planet Limited accepted that, at the time of the Assessment:
- a link on its website did not work however, upon identification this was immediately corrected.
Failure to comply with paragraph 1b, 1c and 2 of Social Responsibility Code Provision (SRCP) 3.4.1 (Customer Interaction)
Compliance with a SRCP is a condition of the licence by virtue of section 82(1) of the Act. SRCP 3.4.1 (amended from 31 October 2019) states:
“1 Licensees must interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This must include:
- a. identifying customers who may be at risk of or experiencing harms associated with gambling.
- b. interacting with customers who may be at risk of or experiencing harms associated with gambling.
- c. understanding the impact of the interaction on the customer, and the effectiveness of the Licensee’s actions and approach”.
2 Licensees must take into account the Commission’s guidance on customer interaction.”
Blue Star Planet Limited accepted, at the time of the Assessment:
- it did not employ dedicated compliance staff to monitor safer gambling alerts overnight. Customers who reached safer gambling triggers overnight would be manually reviewed the following day
- as a result of the need for manual review and there being no overnight monitoring of safer gambling alerts some customers were permitted to hit several safer gambling triggers without risk assessments and interactions occurring in real time
- it did not implement high-velocity risk alerts which permitted some customers to spend at high velocity without interactions happening in real time
- the financial risk alerts in place at the time of the Assessment failed to give adequate consideration to average discretionary income data and failed to identify customers at the earliest opportunity. It recognises that the safer gambling controls failed to prevent some customers from spending significant amounts of money over short periods of time, before interactions or interventions occurred based on meaningful assessments of the risks presented. Further, while interactions and interventions did occur, it is accepted that these did not occur in real-time (and generally occurred one day later)
- it could have better evidenced how customer interactions were evaluated for their effectiveness
- it did not act quickly enough to identify and interact with two customers reviewed by Officials during the Assessment, despite both exhibiting signs of potentially problematic gambling.
Blue Star Planet Limited Regulatory Settlement
This regulatory settlement consists of:
- £620,000 payment in lieu of a financial penalty, which will be directed towards socially responsible causes.
- agreement to the publication of a statement of facts in relation to this case.
- payment of £3,571.25 towards the Commission’s costs of investigating the case.
In considering an appropriate resolution to this investigation, the Commission has had regard to the following aggravating and mitigating factors:
- the serious nature of the breaches identified
- the impact on the licensing objectives
- the breach arose in circumstances that were similar to previous cases the Commission has dealt with which resulted in the publication of lessons to be learned for the wider industry
- the need to encourage compliance among other operators
- the nature of the breaches may mean other customers were affected that the Commission has not reviewed
- Blue Star Planet Limited’s senior management should have been aware of governance issues that lead to the breaches.
- the extent of steps taken to remedy the breach
- Blue Star Planet Limited’s early recognition of its failings
- the Licensee has been co-operative throughout its dealings with the Commission.
Gambling operators should take account of the failings identified in this investigation to ensure industry learning. Operators should consider the following questions:
- do you have formal processes in place to measure the effectiveness of your AML and safer gambling policies and are findings adequately recorded?
- do you efficiently record all compliance-related decisions and are you able to demonstrate to the Commission, on request, evidence of ongoing assessment, evaluation and improvement?
- do lessons learned from public statements flow into your policy and processes?
- are your customer risk profiles formed by or linked to your money laundering and terrorist financing risk assessment?
- do you have a formalised process for analysing the effectiveness of customer interactions to ensure that reviews were adequately documented and consistent in their approach?
- do you log the types of behaviour which have triggered a customer interaction and keep sufficient records of interactions, along with decisions not to interact especially in terms of the level of detail provided?
- do you have out of hours arrangements in place?
- have your staff received sufficient AML and SR training?
1 The Commission commenced its section 116 review on 7 September 2021.
2 Although the Licensee accepts the breach, it remains of the view that an isolated incident of a single broken website link should not warrant a finding that it breached licence condition 8.1.1.UK Gambling Commission Public Statement
UK Gambling Commission Press Release, Public Statement
Categories: Anti-Money Laundering Civil Monetary Penalties Enforcement Actions UK Gambling Commission updates
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