Dutch licensees must comply with the country’s Money Laundering and Terrorism Financing Prevention Act (Wwft). KSA said it identified a series of issues whereby BetCity breached laws set out in the act.
KSA first approached BetCity over the matter in September last year after customer reports flagged certain breaches. Issues highlighted included that BetCity was not investigating the source of funds of players with high losses.
Among these were instances of players losing €110,000 in a month, €25,000 in one month and €85,000 in six months without intervention. As such, KSA concluded BetCity was unable to monitor customer behaviour continuously.
PlayNorth Limited was also reprimanded over similar issues. The case represented the first time that KSA has published sanctions related to the Wwft.
KSA: Failings continued at BetCity
After analysing the reports, KSA instructed BetCity how to address the issues. The regulator also said it would continue to monitor the operator to ensure compliance.
However, KSA ruled BetCity did not meet the requirements for a large part of the customer surveys assessed between December 2022 and May 2023. In many cases, KSA said that investigations were only started late, after large amounts had already been gambled away.
The regulator also said BetCity was lax in requesting sources of income from customers. In addition, it said adequate action was not always taken, with BetCity on many occasions not reporting unusual transactions.
As such, KSA opted to impose a €3.0m fine.
“In May last year, the KSA issued a broad warning to licensed providers that they had to quickly get their Wwft affairs in order,” KSA chairman René Jansen said. “We then indicated if research shows that providers are underperforming in the field of the Wwft, sanctions will be imposed.
“We’re now following up on this. We are really out of the start-up phase of the market and that also means that there are no more excuses for some things.”
Entain committed to working with regulators
BetCity and its BetEnt parent were acquired by Entain in January this year. Entain agreed to pay an initial €300.0m and the deal also included a deferred contingent consideration of up to €550.0m.
Responding to the news, Entain said the investigation relates to activities in the period December 2022 to February 2023, based on instructions KSA issued to BetCity in September 2022. Entain said it was aware of the latter, prior to completing the acquisition.
“Following completion, Entain commenced implementing improvements to BetCity’s procedures and control frameworks,” an Entain spokesman said. “We have fully co-operated with the KSA investigation and are committed to working with regulators in all markets to ensure the highest standards of player protection.”
Further blow for Entain
News of the fine will come as another regulatory blow for Entain. Last week, Entain said it had reached a settlement with the Crown Prosecution Service (CPS) over historic activities in Turkey.
The in-principle Deferred Prosecution Agreement (DPA) is worth £585.0m, in line with what was originally agreed in August. It will also make a charitable donation of £20.0m and contribute £10.0m to CPS and HMRC costs.
These will be paid in instalments over the term of the DPA. This will run for four years from the date of the final court approval, with Entain seeking final judicial approval in court on 5 December.
Alongside the Turkey case, Entain in August 2022 was ordered to pay a record £17m by the GB Gambling Commission for social responsibility failings.
At the time, Commission chief executive Andrew Rhodes warned the regulator could revoke Entain’s licence in the event of further breaches. Entain also paid a £5.9m settlement for similar failings in 2019.
Original article: https://igamingbusiness.com/legal-compliance/legal/entain-owned-betcity-fined-e3m-in-netherlands/
