Betway Fined Record £11.6 Million Over Failing To Protect Customers
The betting firm Betway, which is an online-only operation, has been handed an £11.6 million fine by the United Kingdom Gambling Commission. It is a record figure that the UKGC have issued, given to Betway on account of the fact that they failed to protect customers and also neglected to carry out suitable money-laundering checks.
One of the major issues that the Gambling Commission flagged up involved one customer who deposited more than £8 million into his account and lost £4 million over a period of four years, with the company failing to check the source of his funds. Another deposited and lost £187,000 over two days without any interaction from Betway.
What Has The Investigation Uncovered?
The United Kingdom Gambling Commission carried out an investigation into Betway, the online gambling operate. During that investigation it was discovered that the bookmaker allowed as much as £5.8 million to ‘flow through the business’, with that money found to either have been a proceed of crime or else ‘reasonably expected’ to be a proceed of crime.
The company was also criticised for accepting stolen money from VIP customers, in spite of the fact that some of them were ‘displaying clear signs of gambling addiction’. Seven customers were the cause of consternation for Betway, on account of the fact that they had proven to be ‘inadequate’ in how they dealt with them.
The gaming site failed to prevent money laundering and problem gambling, which are both high on the list of the UKGC’s watch topics. The customer that deposited £8 million into their account and lost £4 million had his account flagged as being one potentially at risk twenty times without the company doing anything about it.
It comes on the back of Mr Green being fined £3,000,000 last month for similar failings.
Disappointment That Their Licence Hasn’t Been Stripped
As well as issuing companies with fines, the Gambling Commission also has the ability to suspend or even revoke a company’s gambling licence if it feels that its failures have been egregious enough to warrant it. In 2017 the online casino company 888 was issued with a £7.8 million fine, which the £11.6 million issued to Betway dwarfs.
Even so, the decision was taken by the UKGC not to suspend or revoke Betway’s licence. The decision chimes with criticism of the Gambling Commission that it is being ‘outpaced and outgunned’ by betting companies. The criticism was levelled at the governing body by the National Audit Office, which is responsible for monitoring public bodies’ effectiveness.
The Head of the NAO, Gareth Davies, said:
“The risks to gamblers are changing as technologies develop. Yet the Gambling Commission is a small regulator in a huge and fast-evolving industry. While the commission has made improvements, gambling regulation lags behind the industry”.
Between 2014 and 2017 gambling advertising increased by 56%.
Criticism of the UKGC as being ‘too weak’ will hardly be tempered by the latest revelations that Betway acted poorly but won’t have its licence revoked. One customer was unemployed and yet managed to deposit £1.6 million and lose in excess of £700,000 over the course of three years. Betway depended on unverified sources to ensure that they could afford it.
The Labour MP Carolyn Harris, who sits on the All Party Parliamentary Group looking into problem gambling, said:
“Just how exploitative has a gambling company got to be before the Gambling Commission suspends their licence? Betway’s fine for calculated and deliberate manipulation of VIP customers is paltry in comparison with the damage they will have caused to those caught in the web of VIP inducements”.
Struggling Gamblers Allowed To Keep Betting
One of the major concerns for the Gambling Commission was the fact that customers were allowed to keep gambling even after it was acknowledged that they had a problem. One customer had created eleven different accounts and deposited £494,000. That came after they had signed up to exclude themselves from gambling.
The customer took advantage of the GamStop service, yet was able to continue to bet with Betway. This, amongst other things, was used as proof to the Commission that the gambling firm ‘could not provide evidence of any social responsibility interactions’. The UKGC blamed the issue on ‘systemic historical failings’ at Betway.
Gambling firms are supposed to perform checks on where customers get their money from, especially if they’re one of the VIP customers. That is a condition of their operating licence. Yet an external report failed to verify where the customer who deposited £8 million was getting their money from. In spite of this the company’s board of directors decided to let them to keep betting.
‘Little Regard For Welfare’
One of the regulator’s Executive Directors, Richard Watson, was very critical of Betway. He said that the company’s actions suggested that they had ‘little regard’ for either the welfare of VIP customers or the impact that their actions had on those around them. It came on the back of Carolyn Harris calling the betting industry ‘morally bankrupt’.
The Chief Executive Officer of Betway, Anthony Werkman, was understandably unwilling to agree with the governing body’s description of their practices, though he did say that they took ‘full responsibility’. He said:
“The company has no interest in profiting from stolen funds and has improved its systems and shut down its VIP programme”.
Betway has agreed to pay £5.8 million to the victims of crime as well as another £5.8 million to the Gambling Commission’s fund that is aimed at reducing gambling harm. It comes at a time when the UKGC has already ordered a review of VIP schemes, which GVC, the owner of Ladbrokes, is in charge of carrying out. The government is also likely to review the 2005 Gambling Act.
Probe Still Ongoing
In addition to the issues found by the Gambling Commissions investigation, there is also an ongoing probe into ‘responsible Personal Management Licence Holders’. Richard Watson said,
“As part of our ongoing programme of work to make gambling safer we are pushing the industry to make rapid progress on the areas that we consider will have the most significant impact to protect consumers”.
He went on,
“The treatment and handling of high value customers is a significant piece of that work and operators are in no doubt about the need to tackle the issue at speed. We have set tight deadlines for when we expect to see progress and if we do not see the right results then we will have no choice but to take further action. This case highlights again why progress needs to be made”.