888’s Virtual Global Digital Services Ltd subsidiary has reached a settlement worth £2.9m (€3.4m/$3.7m) with the Gibraltar Gambling Commissioner over VIP-related failings in the Middle East.
The Commissioner said a series of weaknesses were identified in 888’s historical compliance approach. These included ineffective know your customer (KYC) obligations that failed to record and verify address details in certain cases.
Other failings related to overreliance on high thresholds for enhanced due diligence (EDD) intervention and lack of clarity in this approach. The review also noted a lack of consistency in the effectiveness of EDD checks.
The Commissioner said there was an inconsistent approach over keeping accounts open with restrictions as opposed to closing accounts.
In addition, the review flagged an overreliance on open-source checks and failure to ask customers to provide source of funds and source of wealth documentation.
Middle Eastern VIP scandal leads to CEO’s resignation
The William Hill operator suspended Middle East VIP activities in January pending the outcome of an internal compliance investigation.
The business said certain best practices had not been followed over KYC and anti-money laundering (AML) processes for 888 VIP customers in the region. This led to Itai Pazner being removed as CEO of the 888 parent group.
While the case related to activities in the Middle East, the review ran in agreement with the Gibraltar Commissioner. The company operates across a range of market but is headquartered in Gibraltar.
This process led to 888 putting new policies and procedures in place to avoid similar issues in the future. Relevant accounts were also subject to an updated risk assessment process.
Gibraltar regulator’s ruling on the case
Making its decision on the case, the Commissioner took into account a number of factors. These included 888 self-declaring the issue and the suspension of all accounts impacted.
The regulator also acknowledged how 888 immediately launched an internal compliance review, with systems and controls having been quickly improved in the period following the admission.
For the avoidance of doubt, the regulator also noted that no specific cases were identified that involved 888 dealing with the proceeds of crime or terrorist financing.
In lieu of a financial sanction, the Commissioner reached a regulatory settlement of £2.9m with the 888 subsidiary.
Part of the settlement will be made available to the Centre of Excellence for Responsible Gaming at the University of Gibraltar.
“Gibraltar licensees are expected to factor the learnings from this case into their own risk assessments, systems and controls,” the Commissioner said.
“888 continues to be considered a fit and proper entity to hold licences in Gibraltar. 888 has enhanced its policies and procedures in remediating the identified historical deficiencies.
“The Gambling Commissioner and Licensing Authority consider this matter closed and will be making no further comment on this matter.”
