Entain Given Record £17 Million Fine For Failing To Monitor Customer Debt
The parent company of the likes of Coral and Ladbrokes, Entain, has been hit with a new record fine for what has been described as ‘completely unacceptable’ failures. The United Kingdom Gambling Commission has whacked Entain with a fine of £17 million, which is a fine bigger than any that the body has issued previously. Not only that, but the company has been warned that it stands to lose its licence to operate a UK-facing business at all if it doesn’t make significant improvements to the way that it operates, including better safer gambling measures for the future.
The biggest issue that Entain has faced has been helping customers that were struggling with gambling debt, such as one person who gambled overnight for long periods and was able to deposit in excess of £230,000 over a period of 18 months. During this time, they were contacted only once by someone from one of Entain’s companies in order to check that everything was ok. One customer, having been blocked from having an account with Coral, was able to open another account with a different Entain product in the form of Ladbrokes and deposited £30,000 in one day.
What Has Happened
The Gambling Commission is a government agency that is tasked with supervising gambling laws in the United Kingdom, ensuring that companies that have a licence from the UKGC meet their licensee requirements. In the case of Entain, which is the parent company of the likes of Ladbrokes, Coral, Gala Bingo and BetMGM, it has been decided that it failed to meet those requirements.
As a result, the Gambling Commission has issued it with the largest fine ever given out by it to a betting company, requiring it to pay £17 million in order to make up for numerous different failures.
A series of ‘completely unacceptable failures’ were discovered by the UKGC, which included being far too slow to help customers that were struggling with debts created by their gambling habits. As an example, one customer was able to make deposits over a period of 18 months, totalling more than £230,000. They were only contacted once in an online chat, otherwise being left to their own devices without anyone from the gambling company concerned checking that it was money that they could afford to lose. Another punter, who lived in social housing, deposited £186,000 in six months with minimal checks.
One of the biggest failures came when customers were able to spend large sums of money at one of the sites in the Entain stable, only to open another account with a different company owned by Entain. In the case of one person, they were blocked from Coral after spending £60,000 over the course of a year but failing to provide a source of funds. In spite of this, they were able to open an account with Entain’s sister site Ladbrokes, depositing £30,000 in one day. As with other customers, insufficient checks were carried out on the source of the customer’s funds.
Yet another customer was able to deposit £742,000 over a period of 14 months, but at no point were they flagged for potentially laundering money. Money laundering is one of the chief concerns of the UKGC, given the manner in which it is a relatively easy way for those that might be of a nefarious disposition to dispose of money gained by ill-gotten means. These things happened between December of 2019 and October 2020, which was before many of the changes that Entain has introduced around money laundering and safer gambling rules, which are now in place.
What Is Being Said
Unsurprisingly, the Gambling Commission didn’t really pull any punches about the fine and the problems that Entain have been through. Speaking about the matter, the Chief Executive of the UKGC, Andrew Rhodes, said, “Our investigation revealed serious failures that have resulted in the largest enforcement outcome to date.” Not only that, but he also pointed out that it was the second time that Entain had ‘fallen foul of the rules’. He said, “They should be aware that we will be monitoring them very carefully and further serious breaches will make the removal of their licence to operate a very real possibility. We expect better and consumers deserve better.”
As for their part, Entain released a statement about the matter. The group confirmed that it had agreed a settlement with the Gambling Commission, adding that it amounted to £14 million for its digital business and £3 million for the retail business. It reached the agreement, it claimed, in order to ‘bring the matter to a close and avoid further costly and protracted legal proceedings’. The company was also quick to point out that the issues were surrounding ‘legacy systems and processes’ from a time before the company was even called Entain, which it was re-branded as in 2020.
Entain moved to draw attention to the launch of the ‘Advanced Responsibility and Care™ (“ARC™”) programme’, which launched in 2021 and uses artificial intelligence in order to monitor every customer’s account in real-time. With a risk assessment accuracy of more than 80% and an uplift in the use of safer gambling tools of 120%, Entain are satisfied that the company is headed in the right direction. This was reflected by the awarding of the Advanced Safer Gambling Standard by GamCare in May of 2022.
What Next For Entain
As part of the agreement between Entain and the Gambling Commission, a Board Sponsor will be appointed in order to oversee the any further improvements that need to be implemented. An independent audit of the company’s relevant policies will also be carried out, as well as its procedures. Given the desire to draw attention to the award from GamCare, though, it is isn’t immediately clear just how seriously Entain is taking the fine that it has been issued. Instead, it appears to be of the opinion that all problems have been solved, even if this is a dangerous way of thinking.
It is especially dangerous when you consider that the UKGC issued Entain with a warning about the company’s future behaviour. The line in what Andrew Rhodes said about the removal of the company’s licence being a ‘very real possibility’ should have alarm bells ringing all around the headquarters of Entain. Not only does the company run a profitable online operation, but Ladbrokes and Coral have 2,746 gambling premises around the UK that could be shutdown if it reaches the point that the Gambling Commission decides to remove the company’s licence to operate a UK-facing business.
