TonyBet fined for AML and social responsibility failings

The UK Gambling Commission (“Commission”) has concluded enforcement action against TonyBet in respect of anti-money laundering (“AML”) and social responsibility breaches.

On 18th January 2023, the Commission fined TonyBet £442,750 for failing to have fair and transparent terms and to follow social responsibility and AML rules. Following a review of the operator’s licence, the Commission also issued an official warning and ordered TonyBet to undergo a third-party audit to assess its implementation of AML and social responsibility requirements.

1. Unfair terms - (Breach of Licence Condition 7.1.1)

The Commission concluded that TonyBet had published unfair terms on its website. The Commission cited various examples, including a term through which TonyBet could request identification documents for withdrawals, which the Commission considered unfair on the basis that the same checks were not required earlier in the business relationship for deposits. Further, the Commission noted that winnings could be confiscated where consumers failed to provide AML documentation within 30 days and accounts considered dormant after six months of inactivity, rather than 12 months.

2. Social responsibility - (Breach of Social Responsibility Code of Practice 3.4.1, issued under section 24 of the Gambling Act 2005)

TonyBet was found to have failed to identify and interact with customers who may be at risk of harms associated with gambling.

3. AML - (Breach of paragraphs 1, 2 and 3 of Licence Condition 12.1.1, Paragraph 1 of Licence Condition 12.1.2 and Licence Condition 15.2.16)

The Commission cited various AML failures, including failing to conduct adequate risk assessments of the business being used for money laundering and terrorist financing and to have appropriate procedures in place to tackle the same.

Comment

Whilst AML and social responsibility issues remain central to most of the enforcement action being taken by the Commission, we are increasingly observing a greater focus from the Commission on fairness and consumer law issues. In the TonyBet case, Kay Roberts, the Executive Director of Operations of the Commission said: “Not only does this case illustrate our drive to clamp down on anti-money laundering and social responsibility failures, but also highlights action we will take against gambling businesses who fail to be fair and open with customers.”. This follows statements made by Andrew Rhodes, Chief Executive of the Gambling Commission, in November 2022, where he said: “By talking about everyone who gambles as opposed to those suffering severe harms, it doesn’t mean the Commission is going to stop pushing for safer gambling, with consumers exposed to less risk. But it does mean speaking more about another of our statutory objectives: to ensure gambling is fair and open. This means we will spend more time looking at offers, terms and practices that can disadvantage consumers and which go against our licensing requirements and we plan to increase the numbers of people we employ in this area.

Operators would be well-advised to ensure their terms and conditions, marketing and practices generally are compliant with consumer law and be prepared for a greater focus on these areas from the Commission as part of their compliance work.

The full detail of the penalty can be read here.