Paddy Power Betfair has been fined £2.2 Million in the UK for social responsibility and money laundering violations.
The penalty from the UK Gambling Commission was levied after a commission investigation revealed that the company failed to adequately interact with customers who were displaying signs of problem gambling. Two customers were using the company’s betting exchange and another three were gambling using the operator’s online presence and retail premises. The complaints—including complaints that he company failed to stop stolen money from being wagered—date to 2016.
In accepting the penalty, Paddy Power Betfair said it has made “significant improvement” to its checks since the time of the cases in 2016, but admitted there were “weaknesses in its responsible gambling and AML policies and procedures.”
“As a result of Paddy Power Betfair’s failings significant amounts of stolen money flowed through their exchange and this is simply not acceptable,” said Richard Watson, Gambling Commission executive director in a press release. “Operators have a duty to all of their customers to seek to prevent the proceeds of crime from being used in gambling.
“These failings all stem from one simple principle—operators must know their customer. If they know their customer and ask the right questions then they place themselves in a strong position to meet their anti-money laundering and social responsibility obligations,” he said.
Under a settlement, Paddy Power will return £500,000 to the impacted parties and will make a £1.7m payment to GambleAware, the independent charity which commissions research, education and treatment services to reduce gambling related harm.
“We have a responsibility to intervene when our customers show signs of problem gambling. In these five cases our interventions were not effective and we are very sorry that this occurred,” said Peter Jackson, CEO of Paddy Power Betfair. “In recent years, we have invested in an extensive program of work to strengthen our resources and systems in responsible gambling and customer protection. We are encouraged that the Gambling Commission has recognized significant improvement since the time of these cases in 2016.
“This work is continuous and we are committed to working in partnership with other operators, and with the Commission, to become better and better at protecting customers.”
In another enforcement action, Rank Group has been fined £500,000 for breaching problem gambling rules, after a customer lost £1 million in a single 24-hour period.
According to the commission, the customer gambled “substantial amounts” at Rank’s land-based Grosvenor Casino and online via Grosvenorcasinos.com after £1 million was credited to his account.
An investigation found that Rank failed to interact with the customer who was displaying problematic behavior and also had contacted the customer during a period of self-exclusion and failed to adhere to commission rules on granting credit.
“We expect all operators to protect any consumer who maybe experiencing problems with their gambling, and operators shouldn’t fall into the trap of thinking that VIP customers don’t experience difficulties,” Watson said. “No matter how wealthy customers are, operators still need to monitor them effectively to ensure they aren’t showing signs of problem gambling. It is certainly not appropriate to visit customers during a period when they are self-excluded.”
Watson, however, did say that rank made an immediate response to the complaint and took “positive action” over the incident, resulting in a lower fine from the commission.
“This penalty package would have been a lot higher were it not for the positive action Rank took in terms of self-reporting their failures and being open and transparent during our investigation,” Watson said.
