The UK Gambling Commission has fined Videoslots Limited £650,000 following an investigation that uncovered significant anti-money laundering (AML) and social responsibility shortcomings. The operator, which runs videoslots.co.uk, mrvegas.com, and megariches.com, has also been issued a formal warning and must undergo an independent third-party audit to ensure compliance with regulatory standards.
Social Responsibility Failures
The Commission found that Videoslots relied on flawed monitoring systems that failed to properly track customer activity and identify potential gambling harm.
- Deposit limits were applied across calendar months but excluded initial deposits, allowing customers to exceed limits.
- Examples included:
- One customer losing £5,000 in a month despite a £3,000 limit.
- Another losing £5,000 in under 24 hours with the same limit.
- A third losing £7,500 over 18 days despite a £2,000 limit.
- In one case, a customer lost £6,550 over three active days without any operator intervention.
AML and Counter-Terrorist Financing Failures
The investigation also highlighted weaknesses in Videoslots’ AML/CTF framework, including policy gaps, poor record-keeping, and excessive reliance on automated algorithms.
- A customer deposited over £75,000 in digital pre-payment vouchers within 16 days, later transferring proceeds to four separate bank accounts.
- The customer accessed accounts from outside Great Britain, yet automated risk scoring failed to flag the activity as high risk.
- Delays in requesting source-of-funds information led to inadequate due diligence and oversight.
- In another case, high levels of deposits and withdrawals were wrongly assumed to be funded by recycled winnings, without proper scrutiny.
Regulator’s Statement
John Pierce, the Commission’s Director of Enforcement, stressed the seriousness of the failings:
“Operators are required to have effective Social Responsibility and Anti-Money Laundering policies, procedures and controls as a condition of holding an operating licence. In this case, deposit limits proved ineffective and AML controls fell short of the standards we expect.”
He added that reliance on algorithms without robust oversight allowed customers to gamble large sums unchecked:
“Open-loop payment systems are high risk because they enable anonymous deposits and make it harder to trace funds. Videoslots failed to implement timely customer interactions and did not conduct enhanced due diligence until spend thresholds were significantly exceeded. Such failings are unacceptable.”
