Isle of Man Issues $870K Penalty to Betsson Subsidiary

Key Takeaways:

• BMO Manx was fined $870,000 by the Isle of Man’s gambling regulator.
• The fine was due to anti-money laundering and counter-terrorism financing compliance failures.
• Issues included lack of enhanced due diligence for high-risk customers and delayed compliance procedures.
• The fine was reduced from an initial $1.25 million after the company took remedial steps.
• BMO Manx accepted the findings and is working to improve compliance despite no longer holding a license.

Regulator Imposes Significant Fine

Betsson’s subsidiary, BMO Manx, has been penalized by the Isle of Man’s Gambling Supervision Commission, receiving a substantial fine of $870,000 (£700,000) for significant compliance failures.

Compliance Shortcomings Highlighted

The Isle of Man’s gambling regulator identified serious shortcomings in BMO Manx’s anti-money laundering (AML) and counter-terrorism financing (CTF) procedures. A particularly glaring issue was the lack of enhanced due diligence for high-risk customers, a critical component in preventing illicit activities within the gambling industry.

Failure to Terminate High-Risk Relationships

Compounding the company’s compliance issues, the regulator accused BMO Manx of not terminating relationships with high-risk customers when improved due diligence was not carried out. This failure potentially exposed the company to risks associated with money laundering and terrorism financing.

Inadequate Reporting Framework

The Gambling Supervision Commission found flaws in BMO Manx’s suspicious activity reporting framework, noting it was inconsistent or lacking. Additionally, the process for analyzing money laundering and terrorism financing risks was deemed flawed, undermining the effectiveness of the company’s compliance efforts.

Delayed Compliance Procedures

Adding to the compliance lapses, BMO Manx’s procedures were delayed by six months following the business’s official launch. According to the commission, this suggested that insufficient resources and effort were allocated to ensure adherence to regulatory standards from the outset.

Company Response and Fine Reduction

While BMO Manx no longer holds a license in the Isle of Man jurisdiction, the company has accepted the commission’s findings and undertaken reforms to address the shortcomings. As a result of these efforts, the initial fine of $1.25 million (£1 million) was reduced to $870,000 (£700,000).

Implications for the Gambling Industry

The case of BMO Manx underscores the critical importance of robust compliance procedures in the gambling industry, particularly concerning anti-money laundering and counter-terrorism financing measures. Regulatory bodies like the Isle of Man’s Gambling Supervision Commission continue to enforce stringent standards to maintain the integrity and safety of the sector.