UK’s Ladbrokes Coral Group has been fined US$7.3 million for “systemic failings” in protecting problem gamblers and stopping money laundering.

An investigation from the Gambling Commission found that between November 2014 and October 2017, Ladbrokes Coral allowed stolen money to “flow through its business” due to “unacceptable” shortcomings.

Among the key failings highlighted in the report were:

  • Ladbrokes not carrying out any social responsibility interactions with a customer who lost UK£98,000 over two-and-a-half years, had 460 attempted deposits into their account declined and who even asked to operator to stop sending them promotions.
  • Corals failing to check source of funds of customer who spent UK£1.5million over two years and 10 months. The gambler displayed signs of problem gambling by logging in on average 10 times a day, and lost UK£64,000 in one month alone.
  • Ladbrokes allowed someone who they identified as a problem gambler to carry on playing without taking further steps to verify source of funds or if the customer could afford to gamble that amount.

These failings continued after the Ladbrokes Coral Group merger.

As part of the settlement, Ladbrokes Coral Group’s new owners GVC will pay UK£4.8 million and will divest UK£1.1million gained from customers as a result of its failings.

Gambling Commission executive director Richard Watson said: “Decision makers at gambling businesses need to invest in the welfare of their customers and the integrity of money being gambled with.

“These were systemic failings at a large operator which resulted in consumers being harmed and stolen money flowing though the business and this is unacceptable.”

The fine is one of the biggest issued by the gambling watchdog.
The fine is one of the biggest issued by the gambling watchdog. Credit: PA

GVC will also review the top 50 customers for the years 2015-2017 to consider whether any further failings can be identified “and if so they will divest themselves of profit accordingly”.

The commission said GVC had committed to making a number of improvements to the business including overhauling its responsible gaming and customer interaction processes, retraining staff and hiring new staff.

Commenting on the announcement, GVC CEO Kenneth Alexander said: “I am confident that, we now have in place a robust and industry leading approach to player protection.

“More broadly, GVC is determined to take the lead in the critical area of responsible gambling, and is taking decisive, tangible action across a range of initiatives.

He added: “However, there is more to be done and social responsibility and we will continue to work with other gambling companies and the Gambling Commission to raise operating standards.”

What other firms have been hit with fines?

The US$7.3 million penalty for Ladbrokes Coral Group is one of the biggest imposed by the gambling watchdog.

888, one of Britain’s biggest online gambling firms, had to pay a record $10 million in August 2017 as a result of serious failings in its handling of vulnerable customers.

Online gambling business Daub Alderney was hit with a $10 million penalty in November 2018 for failing to follow rules aimed at preventing money laundering and protecting vulnerable consumers.

William Hill had to pay at least $9 million for systemic senior management failure to protect consumers and prevent money laundering in a penalty package announced in February 2018.

Between November 2014 and October 2017, Ladbrokes Coral failed to prevent money laundering and did not do enough to stop problem gamblers.
Between November 2014 and October 2017, Ladbrokes Coral failed to prevent money laundering and did not do enough to stop problem gamblers. Credit: PA

How is the gambling industry regulated?

All commercial gambling businesses which hold a licence under the Gambling Act must comply with the legislation in the Licence conditions and codes of practice.

Under the code of practice, which was reviewed in October 2018, betting firms have a social responsibility code and ordinary code provision which they must adhere to.

Licensees must put in place “policies and procedures intended to promote socially responsible gambling”.

Anti-money laundering systems must also be put in place to detect money laundering under the Proceeds of Crime Act 2002.

Just how gambling firms go about enforcing and policing these policies is not written into the statute.