Celton Manx Faces Hefty Penalty for AML and CTF Breaches on the Isle of Man
The Isle of Man Gambling Supervision Commission (GSC) has imposed a substantial civil penalty of £3.9 million (approximately $5.3 million) on Celton Manx, an online gambling provider, upon discovering significant violations of anti-money laundering (AML) and counter-terrorist financing (CTF) regulations.
Previously authorized by the commission, Celton Manx voluntarily surrendered its license in May 2023, which it had held since August 2008. This penalty follows an extensive inspection conducted by the GSC that revealed numerous contraventions of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018.
Systemic Issues Within Celton Manx
The findings of the GSC included alarming evidence of “systematic” failings. The regulator stated that Celton Manx could not demonstrate adequate compliance with established regulations during its licensed operations. Critical concerns included the failure to enforce adherence to AML/CTF measures among network partners and inadequate customer monitoring protocols.
Additionally, the commission pointed out deficiencies in risk assessment practices regarding AML and CTF, particularly concerning higher-risk customers. It noted inadequate record-keeping and a failure to conduct regular technology risk assessments, as well as delays in reporting relevant information to the Financial Intelligence Unit.
The commission raised red flags about the competence of the company’s designated money laundering reporting officer and AML compliance officer, who were deemed insufficiently qualified to fulfill their duties effectively. The GSC also criticized the provider for not meeting training and educational obligations required by law, undermining the integrity of its compliance strategy.
An Unfavorable Outcome, but Not as Severe as It Could Have Been
Despite the gravity of the infractions, Celton Manx argued that its investigations did not reveal any incidences of money laundering or harm to customers. Nonetheless, due to the extent of the violations, the GSC deemed a financial penalty necessary. Initially set at £5.6 million, the fine was reduced by 30% to the final amount of £3.9 million in recognition of Celton Manx’s cooperation and acknowledgment of its shortcomings.
The GSC stressed the importance of compliance, stating, “The Code lays out pivotal preventative measures to minimize exploitation for criminal activities. Any significant non-compliance escalates the likelihood of AML and CTF risks.” It made clear that it would not tolerate businesses that fail to properly identify and manage risks associated with regulatory breaches.
Additional Action Against SK IOM
In a related matter, another operator, SK IOM, was also penalized with a £70,000 fine for similar AML/CTF infractions. Like Celton Manx, SK IOM admitted its mistakes and showed willingness to cooperate, which led to a 30% reduction from the original penalty of £100,000.
The GSC emphasized the necessity for operators to adopt a proactive approach to their compliance frameworks, ensuring that vulnerabilities are effectively addressed rather than merely reacted to during inspections.
Both cases serve as a stark reminder of the importance of rigorous compliance in the gambling industry, highlighting the considerable consequences that can arise from lapses in regulatory adherence.