BetConstruct‘s B2C subsidiary, Vivaro Limited (VBet), based in Malta, must pay a fine of £337.631 to the UK Gambling Commission after a series of actions that breached the Gambling Act 2005.
A total of £337.631 will be given to socially responsible causes.
The investigation was conducted between October 2020 and June 2021 and revealed a number of failings by Vivaro Ltd. such as money laundering and terrorist financing, breaches of numerous License Conditions and Codes of Practice and failure to ensure responsible gambling policies and practices.
In this regard, Commission officials stated: “The investigation saw customers deposit significant sums of money before KYC checks were carried out, whilst the company’s staff were not informed of Source of Funds (SoF) processes.
“Additionally, Vivaro’s AML checks were deemed ineffective in establishing source of funds when conducting customer reviews, bank statements were not scrutinized to identify other incomes and a ‘reliance was placed on winnings from other operators.
“It is the Commission’s view that whilst some checks were conducted, these were not sufficient until the customer had met the very high AML threshold set by the Licensee. It is the Commission’s view that Vivaro were over reliant on the customer’s net gambling position.”
Giving an example to back up their statement, the UK regulator’s officials said: “We have one customer from Vivaro who deposited $14,850 within two months without SoF being established, and another who showed a bank balance of over £270,000 from a separate betting account.
“Vivaro failed to sufficiently consider the risks associated with recycled winnings. In particular, no additional checks were undertaken to confirm the origin of the funds that had been used to gamble. Customers could be misappropriating funds and re-depositing fresh criminal spend.”
The UK regulator also condemned Vivaro for “failing to sufficiently consider the risks associated with crypto currency gambling, with one customer betting using these funds.”
The commission believes that cryptocurrency represents the greatest risk and in this regard, the regulator stated that “the area should be subject to further investigation, as it looks to examine novel products such as blockchain-based assets.”
No evidence of criminal consumption:
However, there was no evidence of criminal spending by Vivaro, and the UKGC indicated this in its statement: “Vivaro had been cooperative with the investigation and had taken proactive and timely action to address the issues raised.”
Vivaro admitted fault, adding: “there were significant weaknesses in its systems relating to how the firm managed its customers for AML and social responsibility purposes.”
Additionally, the online gambling operator accepted “the voluntary placing of additional conditions on its licence, including a third party audit to be undertaken within 12 months of the firm’s licence review,” according to the UK regulator.