Public Statements

REGULATORY INVESTIGATION UNDERTAKEN BY THE ISLE OF MAN GAMBLING SUPERVISION COMMISSION IN RESPECT OF BMO MANX LIMITED (“BMO”)

A downloadable version of this public notice is available here  - Public Notice BMO Manx Limited 

1. Action

1.1 The Isle of Man Gambling Supervision Commission (the “Commission”) makes this public statement in accordance with powers conferred on it under section 19 of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 (the “Act”).

1.2  The making of such public statement supports the Commission’s statutory objectives of, among other things, securing an appropriate degree of protection for customers of persons carrying on a regulated activity, reducing financial crime and maintaining confidence in the Isle of Man’s gambling industry.

1.3 Consequential to undertaking a regulatory inspection of BMO which identified prima facie contraventions of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 (the “Code”) the Commission opened an investigation into BMO. This Public Statement details the conclusions and outcomes of that investigation.

1.4 In light of the same, the Commission has determined that it would be reasonable and proportionate, in all the circumstances, that BMO be required to pay a discretionary civil penalty in connection with these contraventions in the sum of £1,000,000 discounted by 30% to £700,000 (the “Civil Penalty”).

1.5 The level of the Civil Penalty reflects the failures admitted but also the fact that BMO and the BMO senior personnel co-operated with the Commission and agreed settlement at an early stage.

2. Background

2.1 BMO was licenced by the Commission pursuant to the Online Gambling Regulation Act 2001 (“OGRA”) between 5th August 2021 and 18th August 2023.

2.2 Commencing in May 2023, the Commission conducted an AML/CFT inspection in respect of BMO in accordance with its statutory powers (the “Inspection”). The Inspection, based on a sample of files, identified prima facie contraventions of the Code (the “Contraventions”). The identification of such Contraventions caused the Commission to consider that it was reasonable, necessary and proportionate in all the circumstances to commence a regulatory investigation.

3. Investigation conclusions

3.1 The Investigation identified a range of issues that, when assessed by the Commission against relevant Guidance and legislation established, at all relevant times when formerly licenced. BMO: -

3.1.1. did not conduct Enhanced Due Diligence despite the customers being identified as posing a higher risk of Money Laundering and/or Terrorist Financing, and identifying unusual activity as required by paragraph 14 (3) of the Code.

3.1.2. had a Customer Due Diligence policy that did not evidence the need for Enhanced Due Diligence or additional monitoring in the event of suspicious activity as required by paragraph 14 of the Code.
3.1.3. did not evidence consideration within policies and procedures to not proceed with customer relationships, terminating ongoing customer relationships or of making any internal disclosures in the event that Enhance Due Diligence was not provided within a reasonable timeframe as required by paragraph 14 (4) of the Code.

3.1.4. had a Suspicious Activity Reporting chain that was inefficient and diluted across BMO’s operations via Peru and Malta with numerous parties’ involvements before the MLRO could give true consideration of facts. Paragraph 22(a), (b) and (c) of the Code.

3.1.5. had failed to comply with paragraph 23(b) of the Code where, on a reasonable basis, internal disclosures should have been reported to the MLRO.

3.1.6. did not record and maintain procedures & controls for the purpose of identifying Politically Exposed Persons as required by paragraph 13 of the Code.

3.1.7. did not establish, record, maintain or operate appropriate procedures and controls sufficiently to ensure the verification of identity of its customers as required by paragraph 11 of the Code.

3.1.8. was unable to demonstrate that it had processes or any procedures around how or when ongoing monitoring was determined as required by paragraph 15 (3) of the Code.

3.1.9. had a Customer Risk Assessment and applicable policy that did not have regard to all relevant risk factors or those which may pose a higher risk of ML/TF as required by paragraphs 8 (4), and 8 (7)(b) and (c) of the Code

3.1.10. did not implement its Business Risk Assessment until circa 6 months after commencing online gambling activities, as required by paragraph 6 of the Code.

3.1.11. had not undertaken a Technology Risk Assessment and its Technology Risk Assessment policy was generic and not specific to its business or the risks relevant to its business, as required by paragraph 7 of the Code.

3.1.12. did not have appropriate procedures and controls to monitor and test compliance with AML/CFT legislation as required by paragraph 25 (1) of the Code.

3.1.13. had policies/controls which didn’t ensure that failure to provide CDD must result in the customer relationship being terminated and consideration of an internal disclosure being made, as required by paragraph 10 (5) of the Code;

3.1.14. had an AML/CFT policy that did not sufficiently delineate the responsibilities of the MLRO and AML/CFT Compliance Officer who have distinct regulatory requirements as required by paragraph 21 (1) and 25 (4) of the Code.

3.1.15. had an MLRO and AML/CFT Compliance Officer who was unable to demonstrate having sufficient access to information and resources at all times to properly discharge the responsibilities of these positions as required by paragraphs 21 (2)(c) and 25(4)(c) of the Code.

3.1.16. had an MLRO who was unable to demonstrate or evidence having full access to all relevant business information as required by paragraph 22(d) of the Code.

3.1.17. failed to comply on occasion with Code, paragraph 22(f) which requires that SAR’s are provided to the Financial Intelligence Unit ‘as soon as is practicable’

3.1.18. had policies which did not detail how quickly (i.e. as soon as is practicable) the MLRO must report knowledge of suspicion externally as required by paragraph 24 (2) of the Code.

3.1.19. it was found that the creation and review of key compliance policies and procedures were not undertaken by the AML/CFT Compliance Officer as required by paragraph 25 (1) and (4)(c) of the Code.

3.1.20. could not evidence the AML/CFT Compliance Officer had submitted a report to senior management as required by paragraph 25 (2) of the Code.

3.1.21. failed to meet the training and education requirements of the Code as numerous key role holders were not listed on the training register. Furthermore, of those staff listed, a number had not undertaken relevant training at least annually as required by paragraph 27 (1) of the Code.

3.2. The nature, extent and type of contraventions were of such a nature as to cause the Commission to conclude that, in all the prevailing circumstances, the imposition of a Discretionary Civil Penalty was appropriate.

Metagrow Solutions Limited (“Metagrow”) was licensed by the Isle of Man Gambling Supervision Commission (the “Commission”) in terms of section 4 of the Online Gambling Regulation Act 2001 (“OGRA”) on 2 March 2023.

The Commission considers that it is in the public interest and in furtherance of the Commission’s regulatory objectives as set out at section 5(2) of the Gambling Supervision Act 2010 that the Commission issues this statement to advise stakeholders that further to section 13(1) of OGRA, the Commission cancelled Metagrow’s licence on 6 December 2024 because the Commission was no longer satisfied that Metagrow was under the control of a person of integrity.

Prior to cancelling Metagrow’s licence the Commission had suspended the licence on 12 November 2024.

Section 5(3)(e) of the Gambling Supervision Act 2010 states that the Commission, in discharging its functions, must have regard to the need to safeguard the reputation of the Island.

PUBLIC STATEMENT CONCERNING A REGULATORY INVESTIGATION BY THE ISLE OF MAN GAMBLING SUPERVISION COMMISSION IN RESPECT OF CYBERHORIZON LIMITED (“CyberHorizon”) AND THE ASSOCIATED OUTCOMES

1. Action

1.1 The Isle of Man Gambling Supervision Commission (the “Commission”) makes this public statement in accordance with powers conferred on it under section 19 of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Act 2018 (the “Act”).

1.2: The making of such public statement supports the Commission’s statutory objectives of, among other things, securing an appropriate degree of protection for customers of persons carrying on a regulated activity, reducing financial crime and maintaining confidence in the Isle of Man’s gambling industry.

1.3: Consequential to undertaking a regulatory inspection of CyberHorizon which identified prima facie contraventions of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code 2019 (the “Code”) the Commission opened an investigation into CyberHorizon. This Public Statement details the conclusions and outcomes of that investigation.

1.4: In light of the same, the Commission has determined that it would be reasonable and proportionate, in all the circumstances, that CyberHorizon be required to pay a discretionary civil penalty in connection with these contraventions in the sum of £200,000 discounted by 30% to £140,000 (the “Civil Penalty”).

1.5: The level of the Civil Penalty reflects the failures admitted but also the fact that CyberHorizon and the CyberHorizon directors co-operated with the Commission and agreed settlement at an early stage.

2. Background

2.1 CyberHorizon was licenced by the Commission pursuant to the Online Gambling Regulation Act 2001 (“OGRA”) between 5th March 2021 and 25th September 2023.

2.2 Commencing in June 2023, the Commission conducted a supervisory inspection in respect of CyberHorizon in accordance with its statutory powers (“the Inspection”). The Inspection, based on a sample of files, identified prima facie contraventions of the Code (“the Contraventions”). The identification of such contraventions caused the Commission to consider that it was reasonable, necessary and proportionate in all the circumstances to commence a regulatory investigation.

3. Investigation conclusions

3.1 The Investigation report identified a range of issues that, when assessed by the Commission against relevant Guidance and legislation established, and it is accepted by CyberHorizon that, at all relevant times when formerly licenced, CyberHorizon: -

3.1.1 had not been fully meeting requirements in relation to regularly reviewing its customer risk assessment in contravention of paragraph 8(3) of the Code;

3.1.2 had not fully met requirements in relation to a technology risk assessment being implemented prior to launch of CyberHorizon in contravention of paragraph 7 of the Code;

3.1.3 had not been fully meeting requirements in relation to ceasing customer relationship after customers had not provided enhanced due diligence or had otherwise been found to not meet regulatory requirements in contravention of paragraphs 10 & 14 of the Code;

3.1.4 had not evidenced any process on how records will be retrieved following licence cessation in contravention of paragraph 18 of the Code.

3.2 The nature, extent and type of contraventions were of such a nature as to cause the Commission to conclude that, in all the prevailing circumstances, the imposition of a Discretionary Civil Penalty was appropriate.

4. Statement

4.1 The Commission is satisfied that the imposition of the Civil Penalty on CyberHorizon, reflects the serious nature of the non-compliance and issues identified. The Commission is also satisfied that the directors of CyberHorizon, at this time, recognise and accept that there had been certain shortcomings in that mandatory aspects of the Code had not been complied with.

4.2 It was further noted that CyberHorizon had entered into settlement discussions with the Commission and having accepted certain shortcomings, sought to resolve matters constructively and expeditiously.

5. Key Takeaways

•      All firms undertaking business in the regulated gambling sector have an obligation to conduct their affairs in a manner that adequately identifies and mitigates, amongst other things, the money laundering and terrorist financing risks faced by it.

•      The Commission, in regulating and supervising online gambling, will exercise its powers robustly if material risks to its regulatory objectives are identified in order to ensure that the Isle of Man retains its reputation as a responsible, and well regulated, Jurisdiction.

•     Compliance with the Code is mandatory. Reliance on any third party or service provider for any operational aspects of an Operator’s financial crime control environment should be subject to robust oversight and appropriate assurance controls.

•     Where businesses choose to adopt a higher risk model or take on higher risk clients, the Commission will require that such businesses can demonstrate the necessary degree of competence (including, experience, qualifications, resource capacity and track record) so as to be able to identify and mitigate associated risks.

•     The Commission encourages any Operator subject to a regulatory investigation to engage transparently, openly and urgently with it. The Commission has committed to engaging transparently in the exercise of its enforcement activities. This transparency can be evidenced, amongst other things, through the suite of enforcement policy and guidance documents on its website  www.isleofmangsc.com/gambling/enforcement/

King Gaming Limited was licensed by the Isle of Man Gambling Supervision Commission (the “Commission”) under section 4 of the Online Gambling Regulation Act 2001 (“OGRA”) on 13th June 2017.

This statement follows the Commission’s previous public statement on 24th April 2024 which can be viewed on the Commission’s website.

The Commission considers that it is in the public interest to issue this statement to advise stakeholders that further to section 13 of OGRA, the Commission cancelled King Gaming Limited’s licence on 24th July 2024. This decision has immediate effect.

This decision is made in furtherance of the Commission’s regulatory objectives as set out at section 5(2) of the Gambling Supervision Act 2010.

Notwithstanding the decision above, the Commission continues to liaise with partner agencies regarding aspects of King’s affairs.

The Commission will make no further public comment regarding this until matters are fully concluded.

24th July 2024

Dalmine Limited (“Dalmine”) was licensed by the Isle of Man Gambling Supervision Commission (the “Commission”) under section 4 of the Online Gambling Regulation Act 2001 (“OGRA”) on 16th October 2019.

This statement follows the Commission’s previous public statement on 24th April 2024 which can be viewed on the Commission’s website.

The Commission considers that it is in the public interest to issue this statement to advise stakeholders that further to section 13 of OGRA, the Commission cancelled Dalmine Limited’s licence on 24th July 2024. This decision has immediate effect.

This decision is made in furtherance of the Commission’s regulatory objectives as set out at section 5(2) of the Gambling Supervision Act 2010.

Notwithstanding the decision above, the Commission continues to liaise with partner agencies regarding aspects of Dalmine’s affairs.

The Commission will make no further public comment regarding this until matters are fully concluded.

24th July 2024

The Commission is aware of an ongoing criminal investigation into companies which are regulated by the Commission. The Commission, in fulfilment of its regulatory objectives, has taken the decision to suspend the following licenses, pending a regulatory review:

• King Gaming Ltd;

• Dalmine Ltd

The Commission continues to assist its partner agencies in this matter. As this matter is subject to an ongoing criminal investigation, the Commission is unable to offer any further comment at this time.

On 2 February 2024 the Isle of Man Gambling Supervision Commission (the “Commission”) issued a public statement regarding ‘Millionaire House Club’ advising that the Commission was investigating prima facie contraventions of Isle of Man gambling legislation by ‘Millionaire House Club’.

The Commission wishes to advise that it has now concluded its investigation and, having considered all of the circumstances, has determined the investigation should cease and that no further action is necessary to be taken at this time.

The Commission wishes to thank those members of the public that first alerted it to the activities of ‘Millionaire House Club’ and anyone who thereafter contacted it regarding its public statement. The Commission urges any person wishing to establish any form of gambling product in, on or from the Isle of Man to contact the Commission and to seek legal advice in advance of commencing the activity or circulating any promotional or other associated materials (in whatever format).

A list of gambling operators licensed by the Commission can be found on our website.

Any members of the general public who receive leaflets or similar which promote, or appear to promote, any gambling activity are encouraged to check the list of licensed gambling operators and/or contact the Commission.

Enquiries: any enquiries in relation to this public statement should be directed by e-mail to gscenforcement@gov.im

The Isle of Man Gambling Supervision Commission (the “Commission”) is the statutory body on the Isle of Man charged with amongst other things, the licensing, regulation and supervision of gambling activities.

The Commission has been made aware of the publication and distribution of leaflets by ‘Millionaire House Club’ to Isle of Man households as well as overt references to the Isle of Man on the website operated by ‘Millionaire House Club’.

‘Millionaire House Club’ is not licensed by the Commission to undertake the promotion of gambling activities in, on or from the Isle of Man. The Commission is currently investigating prima facie contraventions of Isle of Man gambling legislation by ‘Millionaire House Club’.

This public statement is issued in furtherance to the Commission’s regulatory objectives as set out in the Gambling Supervision Act 2010.

Enquiries: any enquiries in relation to this public statement should be directed by e-mail to gscenforcement@gov.im