Tumas Group’s gaming arm Tumas Gaming has been fined €233,156 by the Financial Intelligence Analysis Unit (FIAU) after it identified a number of compliance breaches in its operation.
The penalties were imposed in particular over breaches of Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) regulations.
In their report, the FIAU said that the company’s enhanced due diligence (EDD) regulations were “generic and not comprehensive, and that the company “fell short in outlining the appropriate EDD measures to be conducted whenever it encounters higher risk scenarios”
The FIAU said that the shortcomings were aggravated further since the EDD form was too vague and was reliant on information and declarations provided by the players themselves.
Substantiating the claim, the FIAU said that in one file, the player was classified as high risk due to adverse media, cash-based gambling, and geographical risk. It was also observed that the Company was in possession of a judgement by the Maltese courts against the player for failing to declare amounts in excess of €10,000 at the Malta International Airport. Subsequently, the player deposited €416,457 at the cash desk and dropped €309,370 on live tables during the business relationship.
“Nevertheless, the adverse information at hand, and the excessive cash deposit made by the customer were not considered by the Company”, the report reads.
“While the Company remarked that it had a business card confirming the player’s employment, this is not sufficient. This because a business card is considered as a document which is very easy to create, and consequently it does not provide comfort that the information found on it is reliable. The concern was further aggravated as the name on the business card did not even match the player’s name”, it continues.
In another file, the player had been classified as high risk due to the player being uncooperative, coming from a high-risk jurisdiction, having a significant level of cash gambling, complex transactions and adverse media.
Moreover, the player deposited €407,805 at one of the Licensee’s cash desks during a six-day period in January 2020 and dropped €212,650 throughout the business relationship. The player completed the Company’s EDD form and declared that he is a self-employed gaming consultant and his SOW originates from gaming and winnings from casinos. The player also declared that his annual income amounts to €100,000 and above.
“Yet, the Company here again fell short of corroborating the player’s statement with evidence to substantiate both his gaming winnings and his income”, and the report further noted that it had still allowed the player to continue his gaming activity while he was being uncooperative.
The FIAU also faulted the company’s ongoing monitoring, especially in terms of seeing that the deposits by the customers were consistent with the said customer’s business profile.
They cited an example where one player had declared an annual income of between €0 – €40,000 originating from his company ownership, but was then found to have deposited €972,622 at the cash desk during the period 13 July 2008 to 21 February 2020 and dropped €824,111 on live games during the period 1 January 2008 to 4 March 2020.
“Yet no information and/or documentation to verify the source of funds used for these transactions was obtained by the Company”, the report reads.
The FIAU also noted how a well-known businessman who operates in the real estate sector and visited the casino in excess of 300 times, had dropped €988,700 and lost €164,735 between 2016 and 2018.
Despite that, he was only asked to fill in a due diligence report in March 2020.
“Being a well-known businessman is not a justification for not querying the source of funds, especially given the added risks to which cash intensive relationships exposes the Company to”, the report reads.
The company was also found in breach of regulations for the review of politically exposed persons.
“A systematic deficiency was identified in relation to all PEP profiles reviewed, this since no evidence was presented by the Company to demonstrate that senior management approval was sought or obtained”, the report read.
It continues that even though the company said that approvals had been sought by phone, the absence of the necessary documentation and evidence to substantiate this was in breach of the company’s legal obligations.
The company also faced breaches related to record keeping, a lack of information on players’ income range, a failure to provide sufficient understanding of players’ occupation, and “a number of shortcomings concerning the Company’s obligation to obtain information on the purpose and intended nature of the business relationship.”
With all these breaches in mind, the FIAU handed down an administrative penalty of €233,156 and served them with a follow-up directive in order to direct it to implement several requirements to amend the breaches.