Tumas Gaming slapped with €233,156 money laundering fine

The Financial Intelligence and Analysis Unit (FIAU) has issued a €233,156 administrative penalty against Tumas Gaming for breaching anti-money laundering regulations.

The financial watchdog said that serious difficulties were identified in keeping track of the Customer Risk Assessments carried out, and in ensuring adequate upkeeping of them.

It noted how bank notes would be taken by hand during gaming sessions, copies of which would be provided to the shift manager to be inputted within the main sheet.

Major deficiencies arised through the review of customer files. According to the FIAU, 12.5% of the files reviewed yielded no risk assessment at all, while in 30% of the selected sample the officials observed that different ratings had been assigned to the main risk assessment sheet and the Company’s IT system.

“One file warranted a Medium Risk rating by the Company, which was a result of the customer being employed locally, having regular betting patterns, no adverse media, no sanctions matches and slots activity. However, it was also noted that despite occasional credit card transactions, the customer’s main method of payment was cash. However, it seems this was not considered by the Company to risk assess the customer.”

In another instance, one customer was rated low in view of the low level of activity, the player being an EU citizen, and having provided identification documentation.

“However, the Company failed to consider that for a housewife to drop €41,855 in cash in 10 months and €37,635 in a 10-day period was far from being a low level of activity and clearly was not in line with what one would expect from a housewife.”

The rating for the customer increased to medium in December 2019, but the considerations for this increase were visible from December 2018, according to the FIAU.

With regards to identification and verification, on-site FIAU examinations indicated that Tumas Gaming failed to comply or fully implement the relevant internal procedures in 22% of the sample of player profiles reviewed.

“The procedure adopted by the Company is that when a document produced for identification purposes did not contain a residential address, the customer would be told that entry would be refused the next time they went to the Casino unless a document showing their residential address is produced. Notwithstanding, a number of instances were identified in which the Company failed to complete address verification and allowed the customer to enter the casino multiple times after reaching the €2,000 threshold.”

Further shortcomings were found with respect to Enhanced Due Diligence (EDD) measures. The FIAU described these policies and procedures as “generic”, with Tumas Gaming falling short in outlining appropriate EDD measures to be conducted when high risk scenarios are encountered.

“Most of the EDD measures employed by the Company focused on obtaining verification documents or validating the customer’s residential address. This led to a failure to identify and address the risks arising from each set of circumstances, which most often than not related to inconsistencies between customer information and gaming activity, links to high-risk jurisdictions and cash transactions.”

According to the FIAU, this was aggravated by the fact that the EDD form was oftentimes too vague. The form relied solely on Source of Wealth declarations made by the players, with these declarations mostly followed a tick-based approach.

One player in particular, described by the FIAU as a “well-known businessman”, dropped €101,200 and lost €90,600 in 20 days during February 2018, but had only ever asked the player to complete an EDD form on 6 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.”

Tumas Gaming, owned by Tumas Group, was headed by Yorgen Fenech, who eventually resigned from his various directorships after his arrest in connection to the murder of Daphne Caruana Galizia.