UKGC fines Kindred's 32Red and Platinum Gaming for $8.7M amid social responsibility, AML failures

Online operators 32Red and Platinum Gaming, both part of Kindred Group, will pay a £7.1 million ($8.7 million) penalty for social responsibility and anti-money laundering failures uncovered by the UK Gambling Commission. Kindred has now acknowledged the failures in a statement and said the shortcomings are “unlikely” to happen today under a new framework.

32Red, which runs 32red.com, will pay £4.2 million ($5.2 million) whilst Platinum Gaming, which runs unibet.co.uk, will pay £2.9 million ($3.6 million). Both brands have also received an official warning following the Commission's investigation.

Social responsibility shortcomings

Social responsibility failures include instances in which 32Red gambling session times should have prompted earlier identification of customers who may have been experiencing gambling-related harm; and ineffective controls that failed to identify and protect potential problem gamblers. For example, one 32Red customer was allowed to deposit £43,000 and lose £36,000 within seven days.

While customer interactions at 32Red were carried out and logged, it was found that they were “superficial and lacked depth and probing,” says the UKGC, with the operator settling for customer assurances that they were comfortable with their level of gambling and that they could afford it.

As for Platinum Gaming, the operator failed to have effective policies and procedures designed to identify separate accounts held by the same individual. For example, self-excluded or blocked customers were able to register on Platinum Gaming after being blocked or self-excluded on the 32Red platform. The brand also failed to identify and interact with customers who may have been experiencing harms associated with gambling, notes the commission.

AML failures

Failures were also uncovered in anti-money laundering policies. 32Red failed to implement appropriate measures: financial triggers for AML reviews were too high and did not effectively manage risks. 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.

32Red customers subject to a Source of Funds (SOF) / Source of Wealth (SOW) request were, in most cases, not restricted from depositing and gambling during the two-week period allowed by the operator to respond to the request, says the UK Gambling Commission. This resulted in further significant depositing and loss activity occurring.

The brand was over-reliant on confidence that funds coming through Financial Conduct Authority (FCA) regulated firms mitigated/removed proceeds of crime risk. One 32Red account was not deposit blocked, in line with its own policy and procedures, after an information request deadline had expired. This allowed the customer to continue depositing, gambling £16,280 in total and losing £8,321 for a further two weeks until their account was blocked.

Platinum Gaming’s policies, procedures and controls in relation to AML were similarly not appropriate. “The operator failed to ensure that its policies, procedures and controls were kept under review and revised appropriately to ensure that they remained effective,” said the UK Gambling Commission in a written statement.

Kindred responds to regulatory review

Of the regulatory review and the shortcomings uncovered, Kay Roberts, executive director of the Gambling Commission, commented: “These failures highlight clearly that both operators failed to interact with customers in a way which minimizes 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,” Roberts noted. “Ultimately, it is an example which all gambling operators should take notice of to ensure they protect their customers at all times.”

But Kindred has also now responded to the UKGC’s investigation, noting it is now “in an improved position” since the assessment took place and thanked the Commission for recognizing the firm as suitable to still hold an operating license. Kindred accepted that certain systems and processes in place in 2020 and early 2021 were not in line with UKGC expectations around affordability, and that its policies have now been modified.

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,” said Henrik Tjärnström, CEO of Kindred Group.

"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,” Tjärnström added. “Our commitment to reducing gambling harm across our platforms is a key part of our Journey towards Zero [revenue derived from high-risk players] ambition – and we are redoubling our efforts to ensure we continue that progress.”