UKGC fires fresh source of funds warning following MaxEnt licence revocation
Regulator calls on operators to be “full and frank” in dealing with corporate ownership changes
The UK Gambling Commission (UKGC) has warned operators they must prove legitimate source of funds when acquiring or investing in an online gambling business.
The reminder comes after the regulator revoked the licence of online casino operator MaxEnt Limited in June. As part of the ruling, the UKGC claimed it was unable to establish a legitimate source of funds following an acquisition.
MaxEnt was the first operator to be stripped of its UK licence.
MaxEnt appealed to continue its UK-licenced business following a change in corporate ownership, but investigators found that the company had already changed hands once previously, without disclosing the change to the UKGC.
Investigators said they were “unsatisfied” with the source of funds used to finance the MaxEnt business in both transactions.
The UKGC said it was concerned the funds used “posed a risk” to UKGC licensing objectives, namely in preventing gambling from being a source of crime or disorder.
It also complained of a “fragmented disclosure” process with MaxEnt once further information was requested.
The UKGC’s regulatory panel revealed six areas in which MaxEnt was deemed not to have provided the required information in support of its application.
These included an absence of adequate evidence of source of funds used to acquire and finance the business in 2017-18, together with the omission of information from application forms and subsequent regulatory hearings.
“Neither the licensee nor the applicant had a proper appreciation for the need to be full and frank with the Commission, nor for what the Commission requires to process an application of this kind,” the UKGC said.
MaxEnt initially launched an appeal against the revocation of its licence, but has since discontinued that appeal, leaving the UK market entirely.
The operator, which is currently applying for a Swedish gaming licence, told EGR Intel: “We stand by our previous statement that leaving the UK was a strictly business decision, one that has been validated by Royal Panda’s decision to depart and the credit-card regulations UKGC have chosen to introduce.
“The UKGC’s version of events is carefully edited to cast themselves in the best possible light, which is exactly what we have come to expect from them.”