A leading island-based gaming company has been a handed a massive fine of just under £4m over ‘systemic’ contraventions in the anti-money laundering legislation.

Celton Manx, which operates international online sports bookmaker SBOBet, last month surrendered the licence it had held with the Gambling Supervision Commission (GSC) since August 2008.

At the time, the GSC said a licence holder may surrender their licence for various reasons and it was unable to discuss individual circumstances.

But now the regulator has issued a public statement saying that Celton Manx has been ordered to pay a discretionary civil penalty of £5,625,000, discounted by 30% to £3,937,500 due to its early co-operation with the investigation.

The fine follows a regulatory inspection which identified a significant number of contraventions of the Gambling (Anti-Money Laundering and Countering the Financing of Terrorism) Code.

A range of issues were found, some of which were systemic in nature.

These included a failure to carry out an assessment of risk posed by a customer or conduct enhanced due diligence despite the clients being identified as posing a higher risk of money laundering and/or terrorist financing.

Celton Manx did not establish, record, maintain or operate sufficient controls to verify the identity of customers and was unable to demonstrate its procedures set out the action to be taken when suspicious activity was discovered.

The GSC concluded that it was reasonable and proportionate that the company be required to pay a discretionary civil penalty, and the fine reflected the serious nature of the non-compliance and issues and risks identified.

It noted that Celton Manx, which is based at Celton House on the Isle of Man Business Park in Braddan, acknowledged the serious shortcomings in its operational and governance arrangements at an early stage of the investigation and had entered into settlement discussions to resolve matters expeditiously.