The Gambling Commission (UKGC) has hit Kindred Group with a £7.1m fine for social responsibility and anti-money laundering failures.
The operator’s 32Red brand will pay £4.2m of the overall penalty, while its Unibet brand will pay the remaining £2.9m.
Both have also received an official warning following a UKGC investigation, which uncovered breaches at 32Red between June 2020 and March 2021 and at Unibet between July 2021 and October 2022.The regulator ruled that controls at 32Red were not effective and failed to identify and protect problem gamblers, suggesting that gambling session times – among other factors – should have prompted earlier identification of at-risk customers.
For example, social responsibility failings saw one customer allowed to deposit £43,000 and lose £36,000 within the space of seven days.
According to the Commission, customer interactions logged by 32Red were “superficial” and lacked depth after settling for customer assurances that their gambling was affordable.
Unibet meanwhile – trading as Platinum Gaming – was adjudged to have failed to implement effective policies designed to identify separate accounts held by the same individual.
This meant that customers that had previously excluded from 32Red were able to sign up and create an account with Unibet instead.
Gambling Commission executive director Kay Roberts said: “These failures highlight clearly that both operators failed to interact with customers in a way which minimises the risk of them experiencing harms associated with gambling.”
With regards to AML, the Commission said 32Red failed to properly implement measures as described by the Money Laundering, Terrorist Financing and Transfer of Funds regulations.
Reviews of customer accounts identified that the financial triggers for AML reviews at 32Red were set too high and would not have been able to effectively manage risk.
“Inappropriate controls allowed significant levels of gambling to take place within a short space of time without the operator knowing anything about customers’ financial situations,” ruled the UKGC.
The investigation discovered that customers subject to Source of Funds (SOF) requests were, in most cases, not restricted from depositing and gambling during the two-week period allowed by 32Red to respond to the request.
In the case of 32Red, there was an “over reliance” on confidence that funds flowing through FCA-regulated firms either mitigated or removed risks associated with proceeds of crime.
One 32Red account was not deposit blocked after an information request deadline had expired. This allowed the customer to then gamble £16,280 in total, losing £8,321 for a further two weeks until the account was eventually blocked by the operator.
Unibet’s procedures and controls in relation to AML were also deemed inappropriate, as they were not kept under review and revised appropriately.Gambling Commission executive director Kay Roberts said: “These failures highlight clearly that both operators failed to interact with customers in a way which minimises the risk of them experiencing harms associated with gambling.
“Our investigations also showed that policies and procedures were overlooked, both around customer accounts and anti-money laundering practices.
“Ultimately, it is an example which all gambling operators should take notice of to ensure they protect their customers at all times,” she added.
Kindred Group CEO Henrik Tjärnström: “While we accept the outcome, and the acknowledgment that we have already taken significant steps to strengthen our processes, we also recognise that we need to work even harder to ensure a safe and compliant business.”
The UKGC said Kindred co-operated throughout the investigation and took corrective steps to address the identified failings.
In a statement, Kindred accepted that certain systems and processes that were in place in 2020 and early 2021 were not in line with the UKGC’s expectations around affordability.
It also suggested the breaches outlined above would be unlikely to happen today after increasing headcount across its UK compliance and risk management teams.
“While we accept the outcome, and the acknowledgment that we have already taken significant steps to strengthen our processes, we also recognise that we need to work even harder to ensure a safe and compliant business,” said Kindred Group CEO Henrik Tjärnström.
“We appreciate the Commission’s clear recognition that our operations are in an improving position and that we remain fit to hold an operating licence.
“Our commitment to reducing gambling harm across our platforms is a key part of our Journey towards Zero ambition – and we are redoubling our efforts to ensure we continue that progress,” he added.
Kindred said it had reduced the revenue derived from high-risk players in the UK by 57% between Q1 2020 and Q4 2022.
The operator first revealed it had set aside £7.1m for an imminent financial penalty during its Q4 2022 financial results.
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