Hillside (UK Gaming) Pays £343k for AML & SR Failures

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Hillside (UK Gaming) ENC has agreed to a regulatory settlement of £343,035 following a UK Gambling Commission (UKGC) investigation that uncovered significant failings in its anti-money laundering (AML) and social responsibility processes.

The announcement, made by the regulator on 4 April 2024, follows a compliance assessment conducted in March 2022 which led to a full regulatory review. The operator was found to have breached multiple Licence Conditions and Codes of Practice (LCCP) between 2021 and 2022.

In addition to the payment, which will be directed to socially responsible causes, Hillside (UK Gaming) will pay £15,684.50 towards the Commission's investigation costs and has agreed to the publication of a statement of facts.

Details of the Breaches

The UKGC investigation identified failures in two key areas of compliance: anti-money laundering and social responsibility (safer gambling).

Anti-Money Laundering (AML) Failings

Between May 2021 and July 2022, the operator was found to be in breach of licence conditions 12.1.1 and 12.1.2, which relate to the prevention of money laundering and terrorist financing. The Commission highlighted several specific shortcomings:

• Ineffective Due Diligence: The triggers for enhanced customer due diligence were not effective at managing money laundering risks.
• Sanctions Checks: The operator failed to perform financial sanctions checks on new customers before they made their first deposits.
• Over-reliance on Self-Verification: Hillside (UK Gaming) over-relied on customers' annual self-verification of their own identification documents rather than conducting independent checks.
• Inadequate Risk Profiling: Internal procedure documents lacked sufficient detail on how customers would be risk-profiled.

Despite these failings, the Commission's review of specific customer accounts found no evidence of criminal spend or the acceptance of funds from individuals subject to financial sanctions.

Social Responsibility Failings

Between October 2021 and September 2022, the operator failed to comply with Social Responsibility Code Provision (SRCP) 3.4.1, which governs customer interaction. The investigation found that:

• Interactions Were Not Meaningful: Customer interactions were often generic and not tailored to the individual's specific circumstances or potential level of harm.
• Ineffective Risk Detection: The operator's 'Early Risk Detection System' was not demonstrably effective in understanding the impact of an interaction on a customer's behaviour.
• Poor Evaluation: Hillside (UK Gaming) could not effectively determine if a customer had read or understood the information and advice provided during safer gambling interactions.

Regulatory Action and Implications

The £343,035 payment is being made in lieu of a formal financial penalty. The UKGC noted several aggravating factors in its decision, including the fact that the breaches were similar to previous industry cases and that they continued after the operator was made aware of them. However, the Commission also acknowledged mitigating factors, such as the operator's timely co-operation and the remedial steps it has since taken.

The UKGC has used this case to remind all licensed operators of their obligations. The Commission expects gambling businesses to have formal processes to measure the effectiveness of their AML and safer gambling policies, to record all compliance-related decisions, and to ensure staff are adequately trained. This enforcement action underscores the regulator's focus on ensuring operators can prove their systems for protecting players and preventing financial crime are not just in place, but are demonstrably effective.