AGCC enforces fund segregation
Change follows Full Tilt episode - financial reports must now be submitted monthly rather than quarterly.
The Alderney Gambling Control Commission AGCC) has announced that its Category A egaming licensees will be required to hold funds in segregated bank accounts by the end of the year.
It is among several changes on the AGCC’s amended guidelines to come into force next year, alongside a requirement for licensees to submit financial reports every month rather than every quarter.
While the rules come into force immediately, affected operators will be forced to submit a detailed plan to the commission by the end of October, explaining how they intend to fall in line with the regulations. They will then be required to comply in full by 31 December.
The changes come less than one year after former licensee Full Tilt Poker saw its operating licences revoked, and just weeks after a superseding indictment against the operator’s CEO and head of payments referred to the falsifying of financial statements to the regulator.
Category 1 licensees, who currently include PKR, Genting Alderney and Pinnacle Sports, will be required to provide:
“¢ The total amount of funds which the Category 1 eGambling [sic] licensee, and any of its associates, hold to the credit of its registered customers, and
“¢ The balance of each account which holds funds standing to the credit of any of the Category 1 eGambling licensee’s registered customers (including the balance of any bank account held by an associate of the Category 1 eGambling licensee who holds funds standing to the credit of that licensee’s registered customers).
The regulations now say the operators will be forced to hold player funds in an account which “Exists solely for the purpose of holding, and holds only, funds standing to the credit of the licensee’s registered customers…”
Previously they were required to meet the following criteria:
“¢ Cash must always exceed player balances
“¢ Current assets must always exceed current liabilities
“¢ Total assets must always exceed total liabilities (including capital) by at least 25%
According to the recent superseding indictment, Full Tilt’s liabilities had far exceeded its assets for months, with the operator alleged to have falsified an August 2010 statement to the AGCC in which it claimed to have more than $370m in “total cash held” when the actual figure was less than $125m, and in fact held $200m less than the amount owed to players at that time.
The Full Tilt situation was raised by lawyer Jason Chess of Wiggin in response to this week’s DCMS Committee findings. He said: “The Committee appears to have taken on board some of the lessons from the ongoing ‘Full Tilt’ catastrophe.
“In the light of the Full Tilt case, however, the Gambling Commission should consult the industry as to what form of ‘ring fencing’ or protection of player accounts, by all UK-regulated online gambling operators, would be a proportionate response to the worries arising from this unfortunate episode,” added Chess.