Key Moments:
- The UK Gambling Commission (UKGC) issued a £650,000 penalty to Videoslots along with a formal warning and a mandated independent audit.
- Between October 2023 and February 2024, automated monitoring at Videoslots failed to detect and act on several high-risk customer activities.
- UKGC emphasized heightened risks associated with open-loop payment systems and set new expectations for monitoring and reporting.
Regulatory Spotlight on Compliance Failures
Videoslots is under strict UKGC scrutiny. The regulator found major failures in player protection and risk monitoring. The period from October 2023 to February 2024 was expected to be routine. Instead, it revealed major gaps in the automated systems. The UKGC identified that Videoslots’ reliance on automated monthly thresholds missed urgent signals in customer behavior, allowing high-value transactions to occur without prompt human intervention.
Breakdown of Detected Issues
| Customer Activity | Outcome |
|---|---|
| Player lost £5,000 in one month | Internal trigger was set at £3,000 but not acted on |
| Customer lost £5,000 within 24 hours | Warning signs not addressed in real time |
| Individual lost £7,500 over 18 days | Pattern did not prompt sufficient engagement |
| User lost £6,550 across three days | Lack of appropriate interaction recorded |
These instances demonstrated that the automated controls detected activity but failed to escalate the urgency for timely intervention.
Anti-Money Laundering Concerns Revealed
The most severe compliance lapse involved a customer depositing over £75,000 via prepaid digital vouchers within 16 days, later distributing winnings to multiple bank accounts and accessing the account from outside Great Britain. According to the UKGC, Videoslots’ automated risk assessment did not initiate the expected checks for these high-risk activities, despite the clear warning signs inherent in the use of digital vouchers, which can be funded through channels like credit or cryptocurrency acquired through third parties.
The regulator highlighted the need for all operators to treat such payment methods as high risk and monitor them rigorously.
Videoslots Responds to Regulatory Findings
CEO Alexander Stevendahl challenged aspects of the UKGC’s public statement, maintaining that the company had “cooperated throughout the process and applied every improvement the UKGC asked for.” Stevendahl further stated that it was inaccurate to suggest customers had breached their deposit limits and clarified that no individual had exceeded their self-imposed threshold. According to Stevendahl, internal processes prompted early reviews well before reaching those personal limits. He argued that, “framing the issue as a limit breach could cause confusion across the industry,” and noted that one anti-money laundering case cited by the Commission was discovered and reported by Videoslots before the regulator’s review. He suggested that providing this context publicly would offer a clearer picture of the timeline for all stakeholders.
Next Steps: Stricter Oversight and Industry Guidance
Following the enforcement action, Videoslots must undergo a full independent audit in addition to the financial penalty and formal warning. The UKGC stated that Videoslots had worked constructively during the investigation and already taken steps to enhance its controls, but the pending audit will determine if the implemented measures are effective in practice. John Pierce, UKGC director of enforcement, emphasized:
“Operators must review how open-loop payment systems such as prepaid digital vouchers are managed in a gambling environment because they are high risk and present operational challenges in terms of effective monitoring.”
The regulator also reminded all licensees using open-loop voucher systems of their obligation to report this as a key event if not yet done. Recent updates to anti-money laundering guidance now cover digital payment platforms, rapid deposit options, and cross-border access controls.
Automation Versus Human Oversight
This enforcement action underlines a wider movement within the British market, highlighting that while automation is important, human oversight remains critical when risk escalates. As Videoslots enters the audit phase, questions remain about how far operators must adapt their systems and processes to ensure both automated controls and manual interventions work in tandem to close any critical gaps.
- Author
Daniel Williams
