The Gambling Commission has revoked the license of a Park Lane casino over allegations of money laundering. Following an investigation by the regulator, the exclusive London hotspot will be forced to close on November 18th. The Park Lane Club is a popular casino, drawing in an elite clientele of multi-millionaires.

The Park Lane Club at Mayfair is one of London’s most exclusive and decadent casinos. ©Chait Goli/Pexels

Money Laundering Allegations

In a statement released by the Gambling Commission, it announced that it has revoked the operating license of Silverbond Enterprises Ltd. Silverbond is the license holder that trades under the Park Lane Club name. The regulator explained that it has revoked the club’s license due to a change in corporate control at the operator. It added that it could not verify whether it would have approved the license, had the operator’s new controller held that position when the license was first applied for.

Helen Venn is executive director at the Gambling Commission. In a press release, she went into more detail about why the regulator has taken such strong action against the casino. She emphasized the importance of the Gambling Commission’s role in maintaining public confidence, which can only be assured when operators provide it with adequate information. She stated:

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“We revoked this licence because we are not satisfied as to the source of funds (SOF) used to acquire and support the Licensee at the time of the change of corporate control or to whom future profits of the Licensee would be paid. We also identified concerns with the suitability of the new controller because of its unsatisfactory history in providing information requested as part of our enquiries.”

The Gambling Commission’s regulatory decisions register offers up some further details on the case. It points out concerns over the suitability of Silverbond’s new controller, following failures to comply with requests for information. It also noted that the operator had failed to provide satisfactory explanations with supporting evidence for the source of funds used to acquire the license. On top of this, there was also uncertainty as to who the company’s future profits would be paid to.

The Telegraph reported that the casinos is believed to be owned by Latvian businessman Vasilijs Melniks, who has previously faced allegations of embezzlement. In 2018 Melniks was accused of laundering €54 million in a deal with Ukraine’s state-owned energy company Naftogaz, allegations which he denies.

Melniks was, for a brief period of just four days, Latvia’s finance minister. In August of 2018, his assets were seized by Ukrainian authorities following an investigation into corruption. Amongst the businessman’s seized assets was Eiroholdings Invest, which owned Silverbond Enterprises. It was because of this situation that the Gambling Commission began reviewing Silverbond’s license.

Doubts Over Ownership

This is not the first time that the Park Lane casino’s operator has found itself in hot water with the regulator. In September 2019, the Gambling Commission slapped Silverbond Enterprises with a £1.8 million fine, after an investigation uncovered failings in social responsibility and money laundering.

In terms of social responsibilities, the casino failed to recognise potential signs of problem gambling. These included a customer who violent and threatened staff, a customer who asked for winnings to be paid to his personal bank account to stop him from playing for longer and a customer who wanted the casino to allow him to deposit more via cheque.

The money laundering charge constituted of the casino failing carry out due diligence check on 61 customers, as well as failing to provide information on how anti-money laundering procedures would be carried out. Formal warnings were given to two personal management license holders at the casino, which was ordered to raise its standards on player protections and combatting money laundering.

Doubts over the ownership of Park Lane Casino have been longstanding, and have even been raised in parliament. In 2018, Labour MP Chi Onwurah raised the question of whether the Gambling Commission undertook adequate checks on Vasilijs Melniks before it granted the Park Lane Casino its license.

Conservative MP Tracey Crouch answered that question, on behalf of the Department for Digital, Culture, Media and Sport. Crouch reached out to the Gambling Commission for her answer, which stated:

“The Gambling Commission has advised me that it undertook enhanced and significant due diligence in relation to Mr Melnik’s Park Lane Club casino licence application in 2014. Based on the result of those checks it was satisfied as to his suitability to be associated with the licence. The Gambling Commission is currently reviewing Silverbond’s (Park Lane Casino’s) licence to provide gambling in Britain.”

Based at 22 Park Lane in the exclusive Mayfair district, the Park Lane Club brands itself as one London’s newest and most desirable private member’s clubs. It is a popular destination for some of the city’s wealthiest visitors, many of whom stay at Mayfair’s five-star hotels. Annual membership is priced at around £1000.

The outside of the club tells little of the elaborate décor to be found inside. Crystal ceilings and tailored decoration create an indulgent atmosphere. The gaming floor offers a range of classic table games, such as blackjack, baccarat and three card poker, hosted by experienced croupiers. It also boasts a unique outdoor gaming terrace, for visitors to take in the London skyline as they play.

The Park Lane Club had already closed its doors for England’s four-week lockdown. Before that, it was subject to a 10pm curfew, to curb the spread of coronavirus. However, as a result of the Gambling Commission’s findings, its casino will not be able reopen as planned after the lockdown. The revocation of the license will officially come into effect on November 18th, although it is subject to appeal.

One of Mayfair’s most famous high-end casinos has had its gaming licence revoked amid a growing controversy about the identity of its owner who remains anonymous due to “risk of violence or intimidation”.

With its crystal ceilings, luxurious restaurant and bars, The Park Lane Club, situated in the world renowned Hilton hotel, is one of the most prestigious casinos for high rollers in London.

Its millionaire clientele can play the roulette and blackjack tables with terrace views over Hyde Park, served by a total staff of 143 croupiers and other entertainers.

But it has been dogged with controversy in recent years, culminating in the Gambling Commission revoking its licence last month over concerns over the source of funds used to buy and operate the famous club.

The casino operator owning the licence is a company called Silverbond Enterprises, which made a profit of nearly £5 million at the club from £31.8 million turnover last year.

Club employs 143 entertainers

The ban raises serious questions over whether Silverbond’s auditors, Deloitte, and bankers NatWest had raised red flags earlier at the business which has a long track record of run-ins with the regulator over moneylaundering controls.

Outsiders in the industry had assumed the Commission’s ban referred to Silverbond’s 2014 takeover by a Latvian businessman who was accused four years later in a Ukrainian court of fraud and moneylaundering.

However, it has now emerged that the businessman, Vasilij Melniks, quietly sold Silverbond in 2018.

It appears that it was that 2018 takeover, and the new owner, which has aroused the Commission’s concerns.

Yet the new owner has used a little-known UK rule known as a “Section 790ZG” allowing people controlling a company to hide their identity at Companies House if they are “at serious risk of violence or intimidation” due to their business’s activities.

Casino Old Park Lane

Silverbond’s shares are listed as being owned by a Geneva service company called SOGIP, which has an Italian banker, Ricardo Tattoni, on the board.

But the identity of the actual owner, or “controller” in legal terms, is impossible to tell.

At the time of the takeover, accounts suggest an £18 million loan to the company from Melniks was paid back to him and extended by the new owner.

Anonymity “ludicrous”

Former casinos regulator Graham White said: “It seems incredible that the ownership of casinos in this country can be a secret. I find it quite staggering, frankly.

“And we need to know fuller details about why the licence was revoked. What due diligence did the Commission do on the past owner and what on the present owner?”

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He said it was “ludicrous” someone could own a business anonymously in such a publically sensitive industry, where risks of problem gambling and moneylaundering are so high.

Problem gamblers and £2m cheques

The Park Lane Club is no stranger to the type of casino problems to which White was referring.

It was fined £1.8 million last year by the Commission for failings in its anti-money laundering and “social responsibility” duties. The Commission found it had failed to recognise potential problem gambling signs including a customer being violent, threatening staff and damaging property.

On the moneylaundering breach, it had failed to carry out the enhanced due diligence checks it should have done on 61 of its top customers. One who was not checked was a politically exposed person who should have been flagged immediately.

Prior to that, in 2016, the regulator found it had improperly allowing three customers to cash cheques of up to £2 million without adequate money laundering checks.

Questions asked in parliament

Separately, after reports of Melniks’ legal troubles in Ukraine hit the Press in 2018, MP Chi Onwurah asked in parliament whether the Commission had done proper due diligence on him before granting him the licence.

Casino On Park Lane Reservations

Tracey Crouch, then Culture undersecretary said the Commission assured her it made “enhanced and significant” investigations.

Melniks, who has denied the Ukrainian charges against him, appears to have exited the business in the same month as that parliamentary question.

Silverbond says its clientele is largely of “Middle Eastern and Asian origin”.

What the company says

Silverbond compliance director Debbie Dunn told the Evening Standard today: “Silverbond Enterprises are currently going through a protracted corporate change of control process with the Gambling Commission following new ownership in October 2018.

“We are unable to comment further to save prejudicing the ongoing legal process but can confirm that recent decision from the Gambling Commission is strongly contested and an appeal has been submitted against that decision.

“The premises can continue to trade during the appeal process.

“Following the sale of the company in 2018 Mr Melniks is no longer a shareholder nor a director of the company so we are unable to comment on his affairs.”

It declined to comment when asked the identity of the new owner.

Riccardo Tattoni is a 65-year-old Italian giving an address in Geneva. He has previously been on the boards of two dissolved UK companies called Felixstowe Developments and Can Pilot and has described himself variously as a banker and consultant.

What the regulator says

The regulator said it had revoked Silverbond’s licence because: “The Commission is not satisfied that it would have granted the operating licence to the Licensee had the new controller been a controller of the company when the application for the operating licence was made.

“In particular, given the Licensee’s failure to provide full and proper explanations with supporting evidence timeously the Commission is not satisfied as to the source of funds (SOF) used to acquire and support the Licensee at the time of the change of corporate control or to whom future profits of the Licensee would be paid.

Casino On Park Lane Apartments

“The Commission also identified concerns with the suitability of the new controller because of its unsatisfactory history in providing information requested as part of the Commission’s enquiries.”

Deloitte and NatWest did not comment. Melniks and the Gambling Commission did not respond to requests for comment.

In its last accounts, dated in December last year, Silverbond said the new ownership strengthened its financial position.