Commission warns betting firms to learn lessons or face greater penalties

Commission warns betting firms to learn lessons or face greater penalties

Gambling firms have been warned they face greater penalties if they do not heed the

lessons set out in a report issued by the industry regulator following a string of high-profile investigations.

The Gambling Commission, which published the new enforcement report on Thursday, has become noticeably tougher in its approach to sanctions recently, handing out penalty packages totalling more than ÂŁ18 million in the last financial year.

The report summarised the lessons from those investigations in response to a demand for the commission to provide clearer advice and guidance to operators.

The regulator's chief executive Neil McArthur said: "This is a call to action to the leaders of operators to set the tone from the top, to lead a culture of compliance that puts doing the right thing for your customers first, and to strive to continuously to raise standards in your organisation.

Operators 'on notice' "As a regulator, we will continue to set and enforce standards that the industry must comply with to protect consumers. We expect operators will learn the lessons outlined in this report and that operator staff, management and their boards will use it as a guide to help decision making and investment priorities."

The report's introduction warned operators they were "on notice" that a failure to adhere to the guidance the commission gave might lead to enforcement action being brought "more swiftly and with greater penalty" if lessons were not being learned or if issues were uncovered by the commission or other bodies.

The report documented a number of concerns held by the commission, particularly around 'VIP customers' not being sufficiently challenged as to their source of funds and also customers experiencing significant problems with gambling when being treated as VIPs. Concerns were also raised about the pace of change in self-exclusion, an imbalance in favour of operators over customers in rights and obligations and also over marketing and advertising.

McArthur added: "In my view, effective regulation requires a balance between deterrence and advice and guidance. We want operators to pay attention to the lessons set out in this document.

"We want them to focus on ways to make gambling fairer and safer for consumers in Great Britain. We also want operators to collaborate and invest the same amount of resource, technology and research into building better protections for consumers, as they do to creating new products, or advertising and marketing campaigns."

Much of the Gambling Commission's enforcement work has been focused on online gambling and the Remote Gambling Association welcomed the report.

It added in a statement: "In all these cases the companies involved have accepted responsibility for their failings and have taken remedial action to prevent them being repeated.

"However, of more importance is that everyone in the industry can learn from their experience in order that standards can be raised across the board.

'Sharing the lessons' "As a regulated sector we are acutely aware of the need to be compliant with regulatory requirements and, where possible, to go beyond those. By sharing the lessons that can be learned from these cases we can help to achieve that."

The Association of British Bookmakers, which looks after the retail gambling sector, said: "Betting shops are fully committed to promoting responsible gambling and ensuring shops are free from crime.

"In 2016, the ABB working jointly with the Remote Gambling Association, launched the Gambling Anti-Money Laundering Group (GAMLG) to ensure our industries remain focused on combating financial crime.

"While the gambling sector has formally been classified by the government as being of low risk, we are constantly reviewing policies and guidance to ensure we remain low risk."

An investigation into William Hill found that failures in anti-money laundering processes allowed at least ten customers who had used stolen money to gamble between 2014 and 2017. It was established that the source of customers' funds was thefts from employers and fraud offences involving the elderly. Hills were hit by a £6.2 million penalty.

Ladbrokes Coral were issued with a £2.3 million penalty in November after two customers gambled around £1.3m of stolen money through its Gala Interactive business. The commission found the operator had failed to adequately interact with the 'VIP' customers who were displaying clear signs of problem gambling.

In August online firm 888 were hit with a record £7.8m penalty after it was discovered by the operator that over the course of a year 7,010 self-excluded customers were able to continue gambling, depositing £3.5m. Customers were able to gamble, using deposits and recycled winnings, to a total of £50.6m.

Action was taken against the owners of online sites 12bet, TLCbet, ​Fun88 ​and 138.com following complaints about unfair terms and conditions for bonus offers at the 2016 Cheltenham Festival. The regulator said the firms acknowledged their handling of the cases

had been "inefficient" and they accepted their terms were "unclear and ambiguous and did not provide a clear definition of bonus abuse".

The Gambling Commission levied its first fine for advertising failings when hitting online operator BGO Entertainment with a ÂŁ300,000 penalty in May last year. The regulator found their adverts to be potentially misleading and continued to find non-compliant ads despite extensive contact with the operator.