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Betfred has been hit with a £3.25m regulatory settlement from the UK Gambling Commission (UKGC) for anti-money laundering (AML) and social responsibility failings.

Done Bros (Cash Betting) Ltd, trading as Betfred, was issued with the settlement following an investigation into its practices between January 2021 and December 2022.

With a retail network of 1,750 betting shops, a strong online presence, regular TV advertising and a slew of sports sponsorships including major horse racing events, privately owned operator Betfred is one of the UK’s best-known gambling brands.

Investigation findings

The UKGC’s review of the business found several failings relating to Betfred’s AML, terrorist financing and social responsibility procedures.

The operator was found to have “insufficient controls in place to protect new customers, and to monitor high velocity spend and duration of play exposing the customer to the risk of substantial losses without safer gambling interaction.”

The business was also found to have made assumptions that “customers were not at risk of harm because they were winning customers,” for example in one case where it failed to carry out any safer gambling interactions with a customer who staked more than £500,000 in two months.

Further, the regulator found a lack of evaluation of the effectiveness of individual customer interactions, as well as “a lack of record keeping which limited the effectiveness of future interactions.”

As for the firm’s AML failures, the UKGC found evidence of “poor record keeping” at Betfred and that financial alert thresholds were set too high.

Those thresholds allowed one customer to lose £61,000 over four months, another to lose £72,000 over nine months, and another to stake over £400,000 and lose more than £120,000 over 11 months, all without enhanced AML checks taking place.

The operator was also judged not to have undertaken sufficient risk assessments, including the increased risk of customers making transactions across multiple retail betting shops, products and platforms.

The case of the poker pro

The ruling around one customer in particular has caught the eye of industry commentators.

As previously stated, the UKGC ruled Betfred had “made assumptions that customers were not at risk [of gambling harm] because they were winning customers.”

One such customer was thought to be a professional poker player, who staked £517,499 between March and May 2022, with net winnings of £8,585 over the period.

According to the Gambling Commission: “It was established that the customer was able to stake close to the entirety of his net worth (based upon open-source checks carried out by the licensee) within a two-month period and should have been subject of safer gambling considerations.”

Commenting on the case on LinkedIn, Northridge Law partner Melanie Ellis offered up her criticism of the lack of detail around this particular customer.

“I am sure the GC appreciates that a person’s total gambling stakes will typically be much higher than their total outlay, particularly in a game like poker,” she wrote. 

“So it’s not entirely clear why the relationship between this customer’s stakes and their net worth was a relevant consideration here, particularly given there was (presumably) decent evidence that they were a professional poker player.

“The GC has not provided any helpful guidance in this statement, merely stating that the player ‘should have been subject of SG considerations’. If the GC wants to improve operator practices it needs to set out what, exactly, Betfred should have done differently in this scenario.”

A warning to others

The UKGC has increasingly emphasised that other UK-licensed operators should pay close attention to rulings such as these.

Kay Roberts, executive director of operations at the Commission, said: “In recent years there’s been a public focus on online gambling but this case illustrates how important it is for us to continue our drive to raise standards across the whole industry.

“Gambling is a legitimate leisure activity enjoyed safely by millions but it is vital that every single operator – either online or offline – has in place effective safeguards to prevent harm or crime.”

Betfred will now pay the £3.25m settlement, including a divestment of £1.05m. All proceeds of the settlement will go to socially responsible causes.

In just September last year, the operator was hit with another penalty worth £2.87m, also for social responsibility and AML failings.

The settlement brings the total amount of financial penalties served by the UKGC throughout 2023 to more than £40m.

Betfred generated £723.2m in revenue in the year ended 25 September 2022 and post-tax profit of £19.6m.

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