UKGC Fines Betfred £2.87 Million
British bookmaker Betfred has been handed a £2.87 million penalty by the Gambling Commission. The fine comes after the regulator uncovered social responsibility and anti-money laundering failures at the operator. Alongside the financial penalty, Betfred has received an official warning. It is the second regulatory fine that Betfred has received in recent years.
An investigation conducted by the UK’s Gambling Commission found Betfred guilty of a number of serious failures. ©Anna Shvets/Pexels
Series of Failures
Betfred, one of Britain’s longest established bookmakers, has been ordered to pay a fine of £2.87 million to the Gambling Commission. An investigation carried out by the gambling watchdog discovered a series of significant failures at the operator, including shortcomings in its anti-money laundering and social responsibility protocols.
Announcing the regulatory action, the Gambling Commission published further details of the case. The following findings are dated between October 2019 and December 2020. Amongst the social responsibility failures were a lack of controls to prevent large levels of high velocity spend from new customers. In one instance, a customer was able to lose £70,000 over a ten-hour period, just one day after opening their account.
Safer gambling interaction triggers were set too high, which meant that safer gambling account reviews weren’t carried out in adequate time when customer spend increased significantly. This left players at risk of gambling harms.
One customer was first interacted with after depositing £20,700 and losing £10,200. However, the next interaction wasn’t conducted until four months later, in which time the customer had deposited £323,715 and lost £69,371.
The investigation also uncovered serious anti-money laundering failures at Betfred. The operator did not fully consider the money laundering and terrorist financing risks associated with its business. In particular, it neglected to address risks connected to customers, transactions, country or geographic area, and product and services.
Betfred did not implement appropriate policies, procedures and controls to manage or mitigate these risks. This included inadequate thresholds, insufficient information on customers and a lack of evidence on ongoing monitoring before financial triggers were reached.
Neither did the operator ensure that its policies, procedures and controls were implemented effectively. Betfred failed to follow guidance issued by the Gambling Commission and did not consider any of the relevant guidelines it had published.
On top of this, the bookmaker failed to implement measures outlined in the Money Laundering Regulations. It did not provide employees with adequate training and did not scrutinize customer transactions. Due diligence and source of funds checks were not carried out sufficiently.
Are Fines a Deterrent?
Speaking on behalf of the regulator, Director of Enforcement and Intelligence Leanne Oxley warned that tougher action could follow if standards are not improved. The Commission is keen that other operators pay attention to this case, and ensure that they are not guilty of the same shortcomings. Oxley added:
“This is a further example of us taking action to investigate and sanction alarming failures. We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.”
The Gambling Commission has, with increasing frequency, expressed its discontent at encountering the same failures across the UK’s gambling operators. Penalties for anti-money laundering and social responsibility failures have become common, however some critics question whether these fines are seen as the cost of doing business for companies that are worth billions.
Betfred’s £2.87 million penalty is the equivalent of around two days of revenue for the company, which paid owners Fred and Peter Done a £50 million dividend last year. Similarly, a £17 million fine handed to Entain earlier this year amounted to a day and a half of the operator’s global earnings. The fine is the biggest ever dealt by the Gambling Commission.
Betfred was previously fined by the Gambling Commission in 2019, at which time it reached a settlement. The operator paid £182,000 to the Commission, which was directed towards the National Strategy to Reduce Gambling Harms. A payment of £15,168 was also taken to cover the costs of the investigation.
In that case, the watchdog found that Betfred had not carried out adequate source of funds checks for a customer who deposited £210,000 and lost £140,000 in November 2017. It turned out that that money had been stolen. Betfred was ordered to return £140,000 to the victim whose money had been stolen.
Gambling Review at Risk
The popular sportsbook has been in business since 1967, when it started life as a single shop in Ordsall, Salford. Since then, Betfred has expanded to run more than 1,600 high-street betting shops across the UK. The operator is also responsible for online gambling sites betfred.com and oddsking.com.
Betfred is still owned by its original founder Fred Done, who the Sunday Times Rich List last year estimated to be worth in the region of £1.235 billion. However, the fine comes at a turbulent time for Britain’s bookmakers. The government is expected to publish the results of a wide-ranging review of the 2005 Gambling Act soon, with reforms to follow.
The Gambling Act Review was first announced in 2019, as part of a commitment to fulfill one of the Conservative party’s campaigning pledges. It was launched in December 2020 and was initially projected to be completed within a year. Nearly two years since the review began, a white paper is yet to be published.
Numerous factors, including the Covid-19 pandemic, the National Lottery License Competition and a cabinet reshuffle have caused the process to be delayed. Most recently, the resignation of ministers and the stepping down of former Prime Minister Boris Johnson have caused the white paper to be put on the back burner once again.
At the time of his resignation in July, former gambling minister Chris Philp stated that he had handed the white paper in to no. 10 for its final approval. Following the naming of Liz Truss as the UK’s new Prime Minister in September, it is possible that the new cabinet will want to make alterations to the document.
It has been rumored that the Gambling Act Review could be amongst a number of white papers slated to be scrapped. While the introduction of new gambling laws would have a considerable impact on the industry, the scrapping of the review could also have significant ramifications for the industry and the government.
