NetBet has been hit with a £650,000 fine and will be subject to an independent audit after an investigation by the UK Gambling Commission (UKGC).
The online casino and sportsbook was penalised after a licence review revealed flaws in its controls over anti-money laundering, counter terrorism financing and social responsibility.
As a result, NetBet Enterprises Ltd, will pay £650,000 for regulatory failures, with the money going towards socially responsible causes.
It is the second time the online operator has been in hot water with the UKGC for failing to comply with licence conditions.
In 2020 NetBet Enterprises was fined £748,000 after the UKGC ruled that NetBet was not up to scratch with its anti-money laundering and social responsibility measures.
Issues That Led To NetBet’s Fine
The Gambling Commission oversees gambling and gaming law in the UK and is responsible for issuing and enforcing licences for both land-based and online operators.
Last weekend, Victoria Gate Casino in Leeds was forced to close by the UKGC after its licence was suspended following a compliance assessment.
In more severe cases, an operator’s licence can be revoked permanently.
NetBet’s latest transgressions were laid out in the UKGC’s online public statement which detailed NetBet Enterprise’s shortcomings following a licence review between November 2023 and July 2024.
Anti-money laundering failings included an over reliance on pre-set financial triggers, with the UKGC discovering examples of customers being able to spend disproportionally to their net income.
There were “concerning behaviours” from some users that were identified by the UKGC but which NetBet had regarded as being low risk.
One customer remained at low-risk status despite being in a higher-risk occupation and depositing around £2,000 via Apple Pay over a four-day period.
The customer submitted a payslip which showed monthly net pay in the region of £2,800 but when the same customer later deposited £1,650 in a two-hour period, it was not refereed to the money laundering reporting officer.
Also, the operator’s measures to identify money laundering and terrorist financing omitted key risks around high stakes gambling, third party business relationships and controls relating to third-party nationals living in the UK.
Highlighted among NetBet’s Social responsibility failings was having a poor system of communication with customers who may be struggling with gambling problems and only having a manual process to review indicators of problem gambling such as overnight play or a flurry of increased deposits in a short space of time.
During the period of assessment, one customer started gambling at 3.32am and within three minutes had deposited and placed their entire balance of £1500 on poker.
This behaviour continued at similar times over four further visits, but the customer only received automated emails and pop-ups after hitting safer gambling alerts.
Another customer was able to deposit £31,000 within two days by completing the transactions at the end of one month and the start of the next, as the £15,500 deposit limit is set for each calendar month rather than a 30-day period.
This behaviour was only picked up after a manual review of the player’s account.
Executive Summary From The UKGC
John Pierce, the UKGC’s Director of Enforcement, said: “This case highlights the serious consequences of failing to meet anti-money laundering and social responsibility obligations.
“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.
“The operator was instructed to take immediate action and make significant improvements to its systems and controls.
“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.
“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.”
Second Offence For NetBet
In October 2020, NetBet Enterpises was one of three firms punished as the Gambling Commission imposed tougher licence conditions on online operators.
Among the failures listed was not checking source of funds documents rigorously enough and not implementing its responsible gambling policy in an effective manner.
NetBet agreed to introduce changes to the way it processed its customer assessments, paying more consideration to the amount of time a user is logged in, imposing automatic bet limits on users who exhibit signs of problem gambling and providing an affordability calculator as part of its offering.
The business agreed to pay a £748,000 fine which would help fund a government initiative which was running at the time, the UK’s National Strategy to Reduce Gambling Harms.
