Grosvenor Casinos to pay £5m over AML and safer gambling failures
Three Rank Group-owned casino operators will pay more than £5 million after a Gambling Commission investigation uncovered serious anti-money laundering and safer gambling failures, including customers being allowed to lose hundreds of thousands of pounds without adequate checks or intervention.
Grosvenor Casinos Limited, Grosvenor Casinos (GC) Limited and Gaming Group Limited, which together operate 51 casinos across Great Britain, are covered by the £5,012,261 regulatory settlement.
The settlement was reached following a licence review into Grosvenor Casinos Limited, with the Gambling Commission saying the agreement was accepted on behalf of that company and the wider group because the three businesses used the same policies, procedures and controls.
The investigation uncovered failures across both anti-money laundering controls and the protection of customers considered at risk of gambling harm.
Gambling Commission Executive Director of Operations Sue Young said the case demonstrated that major compliance failures were not restricted to online gambling businesses.
“Larger enforcement cases are often associated with online gambling but, as today’s announcement shows, the risks of anti-money laundering and social responsibility failures are equally alive in the land-based sector,” Young said.
“We would advise all premises-based operators to take a careful look at this case and ensure their own business is not making the same mistakes, and therefore they do not face costly and inevitable Commission action.”
In one of the most significant cases identified by the regulator, a customer returning to Grosvenor casinos after a lengthy absence lost around £200,000 across just two visits.
The Commission found there was no adequate photographic identification on file and no evidence of the customer’s income had been recorded in accordance with Grosvenor’s own policies.
In another case, a customer exclusively gambling with cash recycled around £85,000 through a casino over approximately 11 weeks.
Despite the activity, Grosvenor did not increase the customer’s money-laundering risk rating and adequate enhanced due-diligence checks were not carried out until the customer’s losses had reached approximately £13,000.
The regulator also found problems with Grosvenor’s treatment of cryptocurrency as a source of funds or wealth.
Its procedures appeared to focus on whether cryptocurrency had been converted into traditional currency through an appropriate bank account before being used for gambling, rather than adequately assessing the risk and legitimacy of the original crypto assets.
Other customers who should have been subject to enhanced checks were incorrectly treated as standard risk.
The Commission specifically identified records involving a customer using cryptocurrency as their source of funds and another customer identified as a student from China. Grosvenor’s own policies required such customers to receive a higher risk classification and enhanced due diligence.
Customers allowed to lose huge sums
The Gambling Commission also uncovered several examples where customers experiencing potentially concerning gambling behaviour were allowed to continue playing without appropriate intervention.
One long-standing customer won approximately £260,000 over a short period before losing around £250,000 in just 12 days. The regulator found no recorded safer gambling interactions during that period.
Another long-standing customer described as wealthy lost approximately £50,000 without a safer gambling interaction taking place.
The Commission was particularly critical of instances where a customer’s perceived wealth or previous winnings were used by casino staff as justification for only limited safer gambling intervention.
In another case, a customer gambling with verified winnings from another gambling operator was allowed to lose around £25,000 before safer gambling interactions began.
Grosvenor subsequently conducted several interactions with the customer because of the frequency and length of their casino visits, but failed to escalate its response.
The casino could have considered measures including limits on gambling time or spending or restricting access to debit-card facilities.
Instead, stronger action was not taken until the customer acknowledged that their previous winnings had been exhausted.
Even after that admission, the customer was allowed to lose another £11,000 over the following six weeks before their gambling was suspended.
The Commission said records also showed people returning after periods of self-exclusion being permitted to gamble significant amounts and suffer substantial losses.
Repeated warnings failed to trigger stronger action
Investigators found that Grosvenor sometimes repeatedly carried out the same type of safer gambling interaction despite there being little evidence that those interventions were changing a customer’s behaviour.
In one case, repeated interactions concerning losses and the speed of gambling failed to change the customer’s behaviour, with losses eventually exceeding £73,000.
The Commission found no evidence that incidents of this kind had been properly evaluated to determine whether Grosvenor needed to change its procedures or retrain staff.
The regulator concluded that Grosvenor had failed both to properly interact with customers at risk of gambling harm and to adequately assess whether its interventions were actually working.
AML procedures had not kept pace with regulations
The investigation also found that Grosvenor had failed to properly update parts of its AML framework following changes to the UK’s Money Laundering Regulations in 2020.
That resulted in at least one customer not being classified as high risk when the regulator considered that classification appropriate.
The Commission also found that venue managers had been given discretion over some AML decisions.
While the regulator said that autonomy was not inherently problematic, it resulted in cases where evidence concerning customers’ source of funds or source of wealth should have been obtained and sent for closer scrutiny but was not.
In one case, a customer was consequently able to lose a significant amount of money that the Commission said may or may not have belonged to them. Evidence relating to the funds had been obtained but had not been submitted to Grosvenor’s central compliance team for scrutiny.
The regulator concluded that unclear AML procedures had contributed to high-risk customers receiving inappropriate risk classifications, high-risk sources of funds being accepted without sufficient scrutiny and due-diligence deadlines for some customers being improperly extended.
Grosvenor must undergo external audit
The £5,012,261 payment is being made in lieu of a financial penalty and will be directed to the UK Government’s Consolidated Fund.
Grosvenor will also pay the Gambling Commission’s investigation costs and has agreed to an independent third-party audit of its business within six months of the conclusion of the licence review.
The regulator noted that Grosvenor had previously received formal advice concerning similar areas of compliance.
However, it also took into account mitigating factors, including that the operator fully cooperated with the investigation and moved quickly to implement changes intended to address the failures.
The Commission’s licence review found Grosvenor had breached two licence conditions covering the prevention of money laundering and terrorist financing and failed to comply with multiple social responsibility requirements governing customer interactions.
Grosvenor Casinos Limited continues to hold active Gambling Commission licences covering land-based casino operations as well as remote casino and betting activities.
