Also handed an official warning

UKGC fines Betfred $3M for social responsiblity, AML failures

2022-09-28
Reading time 2:31 min

The UK Gambling Commission announced Tuesday that it has handed bookmaker giant Betfred a GBP 2.87 million ($3.06 million) fine. The penalty was delivered to Petfre Gibraltar Limited, which runs betfred.com and oddsking.com, for social responsibility and anti-money laundering failures. The brand will also receive an official warning for failures at the business. 

Leanne Oxley, Gambling Commission Director of Enforcement and Intelligence, spoke in an official statement released by the watchdog and explained 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,” she added. “Where standards do not improve, tougher enforcement will follow.”

As detailed by the UKGC, social responsibility failures involving this particular case included a lack of controls to prevent large levels of high-velocity spending by new customers. One customer was allowed to lose GBP 70,000 ($74,700) over a 10-hour period, just a day after opening the account. 

The company also set safer gambling interaction triggers too high. This meant that, in the face of indicators of increased spending, there were no safer gambling account reviews conducted in a timely manner. One customer was first interacted with when they had deposited GBP 20,700 ($22,000) and lost GBP 10,200 ($10,888). The next interaction did not occur until four months later when the customer had deposited GBP 323,715 ($344,911) and lost GBP 69,371 ($73.913).

When it comes to anti-money laundering failures, the issues involved not fully taking into account money laundering and terrorist financing risks connected to business, particularly risks connected to country or geographic area, customers, transactions and products and services.

The company did not have appropriate policies, procedures and controls in place to manage and mitigate the MLTF risks, including thresholds that were inadequate. It also lacked information on customers and had no evidence of ongoing monitoring prior to the initial financial triggers that were reached. 

The operator also did not ensure that its policies, procedures and controls were implemented in an effective manner, including the failure to follow guidance issued by the Commission and not taking into account any applicable learning or guidelines published by the regulator. 

Moreover, the company failed to thoroughly implement the measures described in the Money Laundering Regulations, including failing to identify the MLTF risks to which the business was subject and failing to establish and maintain policies, procedures and controls to manage and mitigate the risks effectively. 

The operator also provided inadequate employee training, failed to scrutinize transactions to ensure that they were consistent with their knowledge of the customer and their risk profile, and failed to conduct sufficient anti-money laundering, customer due diligence and source of funds checks

In line with the UKGC's Statement of principles for licensing and regulation, Petfre has agreed to a regulatory settlement consisting of divestment of the gross gambling yield of GBP 140,000 ($148.956) lost by one of the affected customers. This money is to be returned to the victim whose money was stolen.

The company has also agreed to a payment in lieu of a financial penalty of GBP 182,000 ($193.643) which will be spent accelerating the delivery of the National Strategy to Reduce Gambling Harms; as well as a payment of GBP 15,168 ($16.138) towards the Commission’s investigative costs.

A Betfred spokesman said: “We will work with the UK Gambling Commission and continually review all our anti-money laundering and social responsibility policies. During our assessment, the commission found no evidence of criminal activity. We remain committed to providing a safer gambling environment for our customers.”

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