Stride Gaming criticises process behind “excessive and disproportionate” penalty

Stride Gaming will not appeal what the company described as the “excessive and disproportionate” £7.1m financial penalty handed to its Daub Alderney subsidiary by the UK Gambling Commission (UKGC) yesterday.

The casino firm put £4m aside in September to cover any potential fine and maintained yesterday that £4m would have been a more justifiable penalty than £7.1m as the UKGC did not find any incidence of identifiable money laundering.

Stride posted a statement on its website that said: “After careful consideration, the group has concluded that whilst it believes the UKGC fine to be excessive and disproportionate, it is not in the interests of the group’s stakeholders to appeal the UKGC’s finding or penalty.

“The board, having taken advice, remains of the belief that a penalty of no more than £4m would be appropriate, particularly as the failings identified by the UKGC were procedural in nature and did not involve any incidence of identifiable money laundering.”

Stride Gaming’s non-executive chairman Nigel Payne said that “certain factual inaccuracies” presented by the UKGC to the regulatory panel on the case had “coloured the size of the fine”.

“Stride Gaming considers that robust anti-money laundering and social responsibility controls are extremely important,” said Payne. “It acknowledges and entirely supports the more robust steps taken by the UK Gambling Commission in recent years to drive improvements across the industry.

“We remain disappointed with the particular circumstances of this case and with certain factual inaccuracies which were presented by UKGC to the regulatory panel in the course of the proceedings, which we believe coloured the size of the fine that has been imposed.

“We are of the view that both the industry and its regulator must be as one in its combined attempt to better regulate the industry and accordingly, we will be seeking to engage with the UKGC to improve the robustness of the process that we have just been through,” he added.

Stride’s non-executive chairman Nigel Payne

In response, the UKGC told EGR Intel that Daub Alderney’s failings were set out beforehand in a case summary, and that these facts were not disputed by the firm at the time.

A UKGC spokesperson said: “The quantum of the fine was determined by a regulatory panel having heard the evidence of the case.

“It is important that all operators learn from this case, but as our chief executive Neil McArthur said last week , it’s important that operators collaborate to make gambling safer for consumers.

“We also want to do more to help the industry so that things go right in the first place and support them in raising standards, not just intervene when it goes wrong, and where we are required to act.”

According to the Commission, cases which due to their scale, complexity, or novelty, or cases which are of strategic importance to the UKGC can be referred to a regulatory panel for determination.

Operators may also ask for cases to be referred to a regulatory panel when they do not agree with a regulatory decision. The regulatory panel for the Daub Alderney hearing was composed of three commissioners.

Richard Williams, licensing partner at law firm Joelson, described the penalty as “astonishing” and said it was likely to have “sent shockwaves through the industry”.

Stride Gaming’s share price dipped by 8% yesterday following news of the financial penalty, before rebounding today.