Spelinspektionen Issues $3.6m Penalty to Mr Green

Mr Green is a highly reputed brand across the international online gambling industry. The brand is owned and operated by William Hill who is revered as one of the best in class. Mr Green is licensed to operate in various countries by different licensing authorities. In Sweden, Mr Green offers its services lawfully courtesy of a Swedish license issued by the Swedish online gambling regulator – Spelinspektionen

This brand went live in 2008 and has been in operation for 13 years now. Until now, it has always been smooth sailing for Mr Green. In fact, Mr Green has always had a squeaky-clean reputation and impeccable service standards track record. The brand is synonymous with some of the most reassuring terms in the online casino and sports betting industry such as fair, licensed, safe and secure.

Considering their reputation and track record, the recent warnings and penalties imposed seem to be rather uncharacteristic of the brand and its core values. It comes as surprise to many. The Swedish regulator has issued two separate warnings and penalty fees that sum up to SEK31.5m (approx. $3.6 million). Additionally, they have warned that Mr Green is at risk of having their Swedish license revoked if they don’t promptly clean up their act. 

Mr Green fined for KYC, AML and Responsible Gambling shortcomings 

So, on what basis was Mr Green warned and fined? As per the accusations laid out by the Spelinspektionen, Mr Green was found to be in violation of KYC mandates, AML requirements and failures with respect to their duties to foster responsible gambling among their users. KYC (Know Your Customer) mandates make it a regulatory obligation for an online gambling operator to verify the identity, age and address of account holders. AML stands for anti-money laundering. 

Spelinspektionen started an investigation and review on Mr Green after they received multiple complaints regarding the brand in November of 2019. The review looked into 15 high stakes customer accounts where total deposits amounted to more than 1m SEK. 

In one case, a customer had made deposits that summed up to SEK39.3m and had lost SEK3.2m. The investigation found that the customer’s annual income was only a fraction of the annual losses incurred through Mr Green. Mr Green had reported such accounts to the financial police. However, after the customer stopped playing at Mr Green, the operator left the matter as is and did not take any further measures to look into the possibility of money laundering. Where was so much money coming from when the customer’s declared income was only a small percent of the losses incurred? 

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Failure to make sufficient contact on high-risk customer accounts 

As per the requirements of the Swedish license, it is the duty of any online gambling operator to proactively identify players who may be addicted to gambling and reach out to them to help them stop. 5 accounts were investigated in connection to Mr Green’s responsible gambling measures. The investigation revealed that on an account of marked increases in gambling activity, Mr Green had done their part and attempted to get in touch with the customers via both email and phone.Having said that, in one particular case, a customer account was found where the player had been making several deposits per day and had incurred a total loss much higher than their declared annual income for multiple years. 

According to the regulator, this was a clear red flag showing that the player was at a risk of gambling related harm and was showing patterns typical of someone addicted to gambling. Mr Green did close this customer’s account in 2020, but the regulator argued that Mr Green had failed to make sufficient contact. The same verdict was reached on various accounts where deposits exceed SEK10,000. Mr Green had failed to connect with such account holders and verify that they were actually playing with their own money and playing in a responsible manner. 

A few other accounts were flagged during the investigation. These were accounts where the customers had incurred losses totalling to more than three times their declared annual incomes. In one case, a customer had lost over six times their annual income. Mr. Green had failed to take any measures in these cases. In response, Mr Green blamed the failure on a technical glitch of an automated identification system that they had newly introduced. The operator claimed that they have since fixed the issue with a better system which has the ability to analyse accounts and do risk assessments to flag at high-risk accounts.

Further, Mr Green stated that going forward they would suspend suspected at-risk accounts if they were unable to establish communications with the account holders. They claimed that the new system for detecting at risk accounts had flagged a higher-than-expected number of accounts and these were placed in a queue with the higest risk accounts being placed first and this caused a delay in investigating all of the flagged accounts. 

As per the Spelinspektionen, if these failures continue to transpire repeatedly, then Mr Green’s Swedish license will be revoked. The fines imposed on the operator were calculated by considering the severity of the failures and the company’s total revenue, which is standard practice when it comes to determining fines for such failures or violations. 

 

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