UK Gambling Commission fines William Hill for control failures

In accordance with an investigation carried out by the Gambling Commission, between November 2014 and August 2016 the betting firm breached anti-money laundering and social responsibility regulations.

The regulatory body said the company did not do enough to ensure prevention measures were effective and, as a result, 10 customers were able to deposit money linked to criminal offences and William Hill gained £1.2m (USD 1.7 M). The company was found to have not done enough to determine the source of the money or if they were problem gamblers.

The penalty is the second biggest imposed by the Commission, following last year's £7.8m (USD 11 M) action against betting firm 888.

In a statement, the Gambling Commission said William Hill's senior management "failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money-laundering and social responsibility processes were effective".

William Hill said it had co-operated with the Commission during the investigation. It added it had committed to an independent review and would work to implement any recommendations following this review.

Gambling Commission executive director Tim Miller told the BBC that William Hill should have been "checking the source of money and understanding their customers and ensuring that potentially vulnerable customers are properly protected".

The investigation by the Gambling Commission covered the period between November 2014 and August 2016. It gave some examples of where it said William Hill's controls were insufficient:

• A customer was allowed to deposit £654,000 over nine months without source of funds checks being carried out. The customer lived in rented accommodation and was employed within the accounts department of a business earning around £30,000 per annum.
• A customer was allowed to deposit £541,000 over 14 months after the operator made the assumption that the customer’s potential income could be £365,000 per annum based on a verbal conversation and without further probing. The reality was that the customer was earning around £30,000 a year and was funding his gambling habit by stealing from his employer.
• A customer who was allowed to deposit £653,000 in an 18 month period activated a financial alert at WHG. The alert resulted in a grading of ‘amber risk’ which required, in accordance with the licensee’s anti-money laundering policy, a customer profile to be reviewed. The file was marked as passed to managers for review but this did not occur due to a systems failure. The customer was able to continue gambling for a further six months despite continuing to activate financial alerts.
• A customer was identified by WHG as having an escalating gambling spend with deposit levels exceeding £100,000. WHG interacted with the customer seeking assurance that the customer was ‘comfortable with their level of spend’. After receiving verbal assurance and without investigating the wider circumstances the operator continued to allow the customer to gamble. In our view that interaction was inadequate and did not review the customer’s behavior sufficiently to identify if their behavior was indicative of problem gambling.
• A customer exceeded deposits of £147,000 in an 18 month period with an escalating spend and losses of £112,000. WHG systems identified the issue but its only response over a 12 month period was to send two automated social responsibility emails. Our view is that this action alone was not sufficient given the customer’s gambling behavior coupled with the severity of the losses.

The company now has to appoint external auditors to review the effectiveness and implementation of its anti-money laundering and social responsibility policies and procedures.

Neil McArthur, executive director at the Gambling Commission, said: "This was a systemic failure at William Hill which went on for nearly two years and today's penalty package - which could exceed £6.2m - reflects the seriousness of the breaches."