Gala Coral returns £846k for AML failures

Gala Coral has admitted to “serious shortcomings” in its anti-money laundering (AML) controls which enabled a customer to use £846,000 gained from criminal activity to fund his gambling.

Following an investigation by the Gambling Commission, the operator was found to have performed an “inadequate” search into the customer’s source of funds and had failed to meet its AML and social responsibility licensing requirements.

The customer, who has since admitted to stealing the sum and been sentenced to several years’ imprisonment, had been graded as a VIP by Gala Coral after staking large sums in Coral shops from 2012 and betting online for a 12-month period from January 2014.

Gala Coral admitted to its failures at an early stage of the investigation, agreed to return the sum in full to the victim of the crime and will also pay the Commission’s costs of ?30,000.

The Commission’s investigation discovered that the majority of the customer’s online and retail activity had occurred during the period he was offending with an increase in the volume and value of bets placed.

During this period, Gala Coral’s online and retail VIP teams believed the customer to be an electrician and that he came from a wealthy family, although no evidence of family wealth was provided.

Initial checks conducted by Gala Coral confirmed only the customer’s identity and the address where he lived.

It was only in the months prior to the closure of his account that Gala Coral connected the customer’s online and retail activity, and realised the full scale of his gambling and the disparity between his spend and lifestyle.

The Commission said the volume and value of the customer’s spend during the period were clear indicators of potential source of funds concerns and that these had not been identified or acted upon by the operator.

In addition, the regulator said Gala Coral did not identify the initial “significant” payments into the customer’s online account during its first few months as indicators of potential money laundering.

The regulator said Gala Coral senior management had co-operated fully with the investigation and had since improved its policies and procedures over the past 12 months through the adoption of new methods and technologies.

Richard Watson, Gambling Commission programme director, said the case should serve as a wake-up call to the industry.

“We expect the industry will learn the lessons from this case, as it is their responsibility to keep crime out of gambling and protect vulnerable people from harm,” Watson said.

“We know that Gala Coral have reflected heavily on this case and have assured us of actions they have taken to address the failings. Operators must proactively monitor customers to keep gambling safe and free from crime,” he added.

Last year Rank Group was forced to forfeit ?950,000 after the Commission found it hadn’t taken suitable steps to protect against money laundering and fulfil its social responsibility obligations in two separate cases.