The big news splashed across the national press on this side of the pond this morning is that gambling giant Paddy Power Betfair has been fined £2.2 million by the UK Gambling Commission. This fine follows a lengthy investigation by the UKGC which concluded that there the firm committed several major failings, primary that the online Betfair exchange Betfair did not put through sufficient anti-money laundering checks for several customers during 2016, which led directly to large amounts of stolen money being wagered on Betfair.
One of the individuals concerned, in partnership with his wife, defrauded a charity at which he worked for almost £900,000, which principally funded his problem gambling. That money, which the Birmingham Dogs’ Home lost, will finally be returned, at least in large part, as a part of the settlement agreed to by Paddy Power and the Gambling Commission.
Furthermore, the firm was found to have insufficiently addressed potential problem gambling in several cases by failing to proceed with strong enough social responsibility checks. According to the commission, these individuals had previously shown signs of problem gambling which Paddy Power did not detect. These customers were betting both online and in High Street betting shops.
“As a result of Paddy Power Betfair’s failings, significant amounts of stolen money flowed through their exchange. This is simply not acceptable,” UKGC Executive Director Richard Watson said in a statement following the announcement. “Operators have a duty to their customers to prevent the proceeds of crime from being used in gambling. These failings all stem from one simple principle – operators must know their customers. If they know their customers, and ask the right questions, they place themselves in a strong position to meet their anti-money laundering and social responsibility obligations”.
£1.7 million of the settlement will go to the charity GambleAware, with the remainder principally going towards those adversely affected by the activity. As part of a published statement on the matter, the commission reminds us that any operator offering betting on an exchange is liable for all money through the exchange with regards to anti-money laundering and social responsibility.
Paddy Power Betfair has acknowledged the mistakes and committed to investing in improving its anti-money ring procedures, as well as enhancing its approach to responsible gambling.
“Know your customer” is the message which comes away from this announcement, loud and clear. The principle £1.7 million payment is being made “in lieu of a financial penalty which would otherwise be imposed”, per the agreement. Yet for all the tiptoeing through the rhetorical tulips, this is essentially another case of the Commission being proactive in prosecuting shortcomings in the UK gambling industry – and another case of a major player in the UK gambling sector having its name etched in the ledger of failings in customer care.
