Paddy Power Betfair to pay $2.7M settlement after UKGC investigation uncovers social responsibility failures

Paddy Power Betfair has been ordered to pay £2 million ($2.7 million) after a UK Gambling Commission investigation, carried out between April and May of 2024, revealed social responsibility failures relating to customer interaction.

Four remote operators, trading under the names Paddy Power and Betfair, will pay the money as part of a settlement with the Commission: PPB Entertainment Limited, PPB Counterparty Services Limited, Betfair Casino Limited, and TSE Malta LP.

The issues related to paragraphs 1, 4, 7, 8 and 11 of Social Responsibility Code Provision (SRCP) 3.4.3 on remote customer interaction. The licensees failed to comply with these Licence Conditions and Codes of Practice (LCCP).

The regulator identified several social responsibility failures. The systems that the licensees had in place were not sensitive enough to identify indicators of harm, with one customer depositing £12,000 during a 15-day period before being identified for review, and another depositing £25,000 in 25 days before being interacted with.

Another customer lost £12,300 in five weeks before being identified for an interaction, while one customer staked £86,000 over a 16-day period during which time they lost £6,000. Despite the high velocity of spend, no manual review of the account took place, the UKGC noted.

In another instance, one customer displayed concerning behaviour in terms of intense spikes in activity without interaction, with their longest session throughout a 17-day period being 7 hours and 46 minutes, during which they placed over 300 bets amounting to £20,000. Their gambling behaviour was only identified as an indicator of harm after hitting a loss trigger, at which time the account was manually reviewed.

The commission acknowledged how Paddy Power Betfair accepted the failings at an early stage, and said the business “swiftly” put an action plan in place to address the issues, fully cooperating with the investigation.

However, the regulator described the breaches as "serious" in nature, impacting the licensing objective of protecting vulnerable persons, and thus approved a regulatory settlement in lieu of a financial penalty. Paddy Power Betfair also agreed to contribute to investigation costs.

John Pierce, Commission Director of Enforcement, said: “This £2 million settlement reflects the seriousness of the failings identified and the importance of meeting social responsibility and customer interaction standards.

“Our compliance assessment in 2024 uncovered examples where interactions fell far short of what is required. These failings should never have occurred. While the licensees co-operated fully with the investigation, accepted the failings early, and implemented an action plan quickly, this immediate response is the minimum we expect from operators when serious shortcomings are identified.

The Commission is encouraging gambling operators to take account of the failings identified in this investigation to ensure industry learning.

“Operators must ensure systems to identify and address harm work effectively and at the right time," Pierce added. "Over-reliance on automation and failure to intervene when clear harm indicators are present expose consumers to unnecessary risk. Where we find failings, we will act decisively to protect players.”

This is the second time Paddy Power Betfair has faced regulatory action. In 2023, the operator was fined £490,000 for marketing to vulnerable consumers.