After a Gambling Commission investigation, online gambling operator Betway has agreed to pay £11.6m, alongside implementing a package of measures, for a series of social responsibility and money laundering failings linked to dealings with seven of its high spending customers.
The regulator said that in one instance, the operator had failed to carry out source of funds checks on a ‘VIP’ customer who deposited over £8m, and lost over £4m, during a four-year period. In another, Betway failed to carry out effective social responsibility interactions with a customer who deposited and lost £187,000 in two days.
Betway will pay a total of £11.6m consisting of £5.8m payment in lieu of a financial penalty, which will be directed towards delivering the National Strategy to Reduce Gambling Harms, and will divest a total of £5.8m, the majority of which to go to victims where it has been found, or could reasonably suspected to be, proceeds of crime. That latter figure could rise under a review of Betway’s top 25 customers for each year over the period.
Richard Watson, Executive Director at the Gambling Commission, said: “The actions of Betway suggest there was little regard for the welfare of its VIP customers or the impact on those around them.”
He said that the case illustrated why operators’ management of high value customers must change, and why the industry must do everything to interact with customers responsibly.
“As part of our ongoing programme of work to make gambling safer we are pushing the industry to make rapid progress on the areas that we consider will have the most significant impact to protect consumers. The treatment and handling of high value customers is a significant piece of that work and operators are in no doubt about the need to tackle the issue at speed.
“We have set tight deadlines for when we expect to see progress and if we do not see the right results then we will have no choice but to take further action. This case highlights again why progress needs to be made.”
The investigation found that as a result of a lack of consideration of individual customers affordability and source of funds checks, the operator allowed £5.8m of money to flow through the business which has been found, or could reasonably be suspected to be, proceeds of crime. The majority of this money will now be divested and returned to victims. The regulator probe also revealed inadequate management oversight, and investigations into responsible Personal Management Licence holders are ongoing.
Betway has also committed to the following:
- An independent review of current policies and processes, its operation, resourcing, quality control and oversight.
- A compliance led review of all current / active UK customers who have not been reviewed in the past six months and review applying its current processes for Anti-Money Laundering and social responsibility. It will dip-sample to test the robustness of the review.
- A full assessment of its top 25 customers by GGY and top 25 customers by deposit for years 2015, 2016, 2017 and 2018 to consider whether any of the failings identified are evidenced and if so, to divest the GGY where appropriate.
- Review any new high or higher risk customers as may be identified by the Commission. Any recommendations arising out of these reviews will be fed back into the improvements that could be made to current processes and dealing with divestment.
- A review of the next 12-month compliance development road maps.
- Ensure that all personal management licence holders, senior management and key control staff undertake outsourced Anti-Money Laundering and social responsibility training.
Gambling Commission Chief Executive Neil McArthur set the industry tough challenges last October as part of a drive to make gambling in Britain safer. One of those focused on the incentivisation of high value customers. Industry-led working groups, supported by the Betting and Gaming Council, are also focusing on ethical game design and the use of advertising technology.
The previous largest penalty packages saw 888 pay over £7.8m for failing vulnerable customers, Daub Alderney pay £7.1m fine for anti-money laundering and social responsibility failures, William Hill pay £6.2m penalty package for systemic social responsibility and money laundering failures and Ladbrokes Coral Group pay £5.9m for past failings in anti-money laundering and social responsibility.