EU Lotto, the operator of lottery betting and sweepstake firm Lottoland, has been hit with a £760,000 fine by the UK Gambling Commission for anti-money laundering and social responsibility failings.

Having concluded its investigation on 2 September, the UKGC accused the company of failing to take the Commission’s formal customer interaction guidance into account whilst AML shortcomings saw a lack of effective analysis of bank statements to prove customer’s addresses.

Additional AML inefficiencies included a failure to restrict accounts following source of funds requests and allowing customers to register third-party debit cards – in some cases in a different name to the user in question – to their account.

Lastly, the regulator’s investigation found that Lottoland was heavily reliant on ‘ineffective threshold triggers’ and ‘generally lacking information’ on customer spending limits based on income, wealth and other risk factors.

Helen Venn, commission executive director, said: “This case, like other recent enforcement actions, was the result of planned compliance activity. All operators should be very aware that we will not hesitate to take firm action against those who fail to meet the high standards we expect for consumers in Britain.”

Further customer social responsibility shortcomings included neglecting to recognise frequently changing deposit limits as an indicator of gambling-related harm among some customers.

There was also a lack of evidence of “suitable financial and affordability investments” to identify whether customers were experiencing harm or at risk of it, whilst also criticising the operator’s responsible gaming interactions with users.

According to the Commission, most interactions with users consisted of an email explaining responsible gaming tools available without the requirement for a customer response, and the regulator has argued that “there was little evidence of interactions being adapted depending on the extent of potential harm”.

Defending his company, Nigel Birrell, Lottoland CEO, remarked: “Lottoland is fully committed to ensuring the highest standards of compliance, including its anti-money laundering and social responsibility obligations in all of the jurisdictions in which it operates.

“The Gambling Commission fine was related to legacy issues around some of our compliance controls which have now been addressed. Lottoland has extensive compliance measures in place and we are confident that our current policies and processes meet all relevant standards. 

“Remedial action taken included significantly increased investment in our compliance function, more than doubling headcount, alongside a host of other initiatives including bringing in third party support, enhancing training and a review of key policies. In addition, we recently committed to building our individual processes into an automated system to improve the system even further.”

EU Lotto is the second major company to face a UKGC fine for social responsibility and AML failings in recent months, following the regulator’s £5.85m penalty against Rank Group subsidiary Daub Alderney.