As the UK government is preparing to unveil the changes in the Gambling Act of 2005, the UK Gambling Commission (UKGC) continues to take regulatory actions to govern the gambling industry in the country. Following a series of inquiries on ‘win a house’ and ‘win a cash’ competitions, the authority issued an official notice on the types of regulations that fall under the Commission’s remit.
After it promised to take the needed actions to ensure the safety of consumers, the UKGC took regulatory actions against Genesis Global Limited. While the UKGC was reviewing the operations of the company, it was temporarily restricted from operating in the UK. Last week, the regulator issued a warning and imposed a fine on Genesis Global Limited due to social responsibility and money laundering failures.
UKGC Clarifies its Regulatory Responsibilities Concerning Free Draws and Prize Competitions
The UKGC decided to respond to a series of questions regarding ‘win a house’ and ‘win a cash prize’ competitions. While organizers of such competitions wish to conduct their operations as prize competitions or free draws, the regulatory body clarified the powers it can exercise. The Gambling Act 2005 simply provides legal definitions of lotteries, free draws, and prize competitions. That said, the same piece of legislation does not regulate free draws of prize competitions but rather provides the conditions under which such activities differentiate from lotteries.
Since the UKGC is not responsible for governing such competitions, the same rules that apply to lotteries and lottery organisers do not apply to companies that conduct prize competitions or free draws. This means that the UKGC cannot offer the same level of protection for such events and those participating in them.
Since the so-called ‘win a house’ and ‘win a cash prize’ competitions do not fall under the category of regulated activities, even if they claim to be organised to support a good cause, the UKGC is not responsible for making sure that the money reaches the said charity.
In the notice published on the official website of the UKGC, the regulator ensured that it will continue to govern such competitions and will act accordingly if prize competitions or free draws are actually lottery games and are not organised in accordance with the Gambling Act 2005.
UKGC Fines Genesis Global Limited and Issues a Warning Following Operations Review
After the UKGC ensured that it will take all measures required to regulate the gambling business in the UK and protect customers, it issued a fine of £3.8 million to Genesis Global Limited. The company operates a total of 14 domains, including casinocruise.com, casinoplanet.com, and genesiscasino.com.
Following an investigation of the UKGC, the operator had its operations in the UK temporarily put on hold. In October 2020, the restrictions were lifted after Genesis proved that it has been working on offering better compliance with the guidelines of its license. Despite that, the UKGC continued to investigate the company’s operations and issued a fine following the results of the investigation. In addition to the financial penalty, Genesis received a licence condition that will require additional review.
Helen Venn, Executive Director of the UKGC, noted that this case should serve as an example for other gambling operators in the UK. She added that the Commission will make sure to properly regulate gambling businesses and will provide a safer environment for consumers.
The actions taken to regulate Genesis followed findings of social responsibility and money laundering failures. As far as social responsibility failings go, the UKGC discovered that the company failed to provide the proper interactions and restrictions on several customers who spend huge amounts in short periods of time.
Another case included a customer losing £197,000 over six months without going through a proper affordability check or being offered a relevant responsibility gambling interactions. The same day that the said customer asked to close her account due to personal reasons, she was allowed to open a new account and deposit £200 with another brand of the operator.
Money laundering failings include the company requiring a customer to provide proof of source of funds only after he had lost £209,000. Then the operator failed to properly assess the customer’s income or verify the information provided by the customer.
Another Genesis customer was able to spend more than £1,300,000 and suffer losses of £600,000 before being asked to provide a source of funds. After going through the process, it was established that the customer could not afford to spend that much. Another case of insufficient checks of a source of funds was also a part of Genesis’ money laundering failings. The said customer lost £107,000 over six months and was not asked to provide enough information to confirm their income.