Have Ladbrokes Been Profiling Customers & Rigging Bets?

Ladbrokes are facing accusations that they’ve been profiling their customers in order to stop successful punters from continued to bet at the same time that unsuccessful ones have been encouraged to not only carry on betting but also place higher stakes.

The suggestion is that one of the country’s biggest bookmakers is essentially rigging the game to make themselves more money by essentially stopping punters that do well from being able to bet.

The news comes after an investigation by the Sunday Mail found documents from the bookie that outlined the system that Ladbrokes use to audit their own customers and figure out how much of a ‘risk’ they were.

They then put customers into a ‘stake factor band’, with those considered to be High Value Customers or VIPs encouraged to stake more than they’d initially intended by offering them special odds, free bets and, in some cases, tickets for sporting events.

This is Nothing New

The reality is that the accusations made against Ladbrokes aren’t really anything new. In 2015 the Guardian published a piece explaining how customers that had won well and often were having their accounts curtailed in order to stop them from being able to place winning bets.

Even back then bookies were either closing the accounts of winning customers or else putting such severe restrictions in place that it became almost pointless for those that liked to bet big.

Attempted bets with stakes of £50 or more would be greeted by a message informing those trying to place them that the maximum stake available to them was as little as £2. The companies tended to pin the blame on their ‘Senior Traders’ who had taken a decision to stop those that had done well from betting.

These accounts weren’t restricted to just one or two people, either. Instead, many punters found themselves in a similar situation as companies feared suffering greater and greater losses.

The Accusations Are Explicit

Yet whilst the accusations levelled at Ladbrokes might not be anything new in terms of curtailing the activities of successful bettors, they are more explicitly laid out than we’ve seen in the past. It’s also the first time that accusations around the idea of ‘helping’ less successful punters to place bets have been made against a betting company in such a manner.

This includes the idea of failing punters being offered incentives in the form of cash-back in order to keep them betting after they’ve suffered a heavy loss and might ordinarily consider stopping.

The leaked documents make reference to a Stake Factor that is the responsibility of ‘Client Risk’ to assess. The Stake Factor, shortened to SF in the documents, then dictates the level of bet that a client is allowed to place. According to the leaked documents, there is a system generated that dictates a percentage amount open to the various customers of Ladbrokes.

New accounts got rated at 1.00, allowing customers to place however much they wanted to as part of their stake, but customers labelled as ‘unprofitable business’ could drop down as low as 0.01 if the algorithm so dictated.

The Client Risk Table

The leaked documents provided a table that showed how each customer was valued, with each .0.01 of the system meaning that only 1% of a customer’s stake could be accepted by the system. The table above shows how it looked:

A Justice for Punters member, Brian Chappell, pointed out that customers who fall under the company’s unprofitable consideration would only be allowed to bet 10 pence instead of £10, whist someone who’s been losing bets can bet as much as they want.

He also drew attention to the fact that some of the methods used by Ladbrokes to gain customer information were illegal, though not all were. He asked whether the likes of the Gambling Commission were turning a blind eye to such companies initiating what he described as a ‘bankrupt or ban’ policy.

New Laws Have Made Profiling Easier

New laws introduced recently with the specific aim of making it harder for customers intent on nefarious methods of betting, such as using gambling companies to launder money and commit fraud, have actually made it easier for betting companies to profile customers in order to employ these unfair methods on them.

Customers are required to provide online bookies with specific detailed information in order to open an account, but it’s this information that is then used against them.

Bookmakers are also able to track the online activity of customers by tracking their web usage, including finding out whether they’ve used sites that compare the odds of the various online bookies before recommending which one is the best one to place a bet with.

Ronnie Cowan, the MP for Inverclyde, has been campaigning for better regulation of the gambling industry specifically because of things such as this. He called the closing of successful accounts and the rewarding of losing accounts a ‘deeply troubling’ issue.

It’s Unlikely To Just Be Ladbrokes

Whilst the leaked documents are specifically in relation to Ladbrokes, few of the critics of the gambling industry believe that the practices described within them will be limited to the company.

For starters, Ladbrokes and Coral merged in 2016 and the new company was bought by GVC Holdings the following year. GVC Holdings, meanwhile, also own other gambling companies such as Foxy Bingo, Sportingbet and bwin.

It’s difficult to believe that a company owned by a larger network would carry out practices that the other gambling enterprises under the same umbrella would also use.

Tom Brownlee, a professional gambler and statistician, drew attention to the fact that LeoVegas and Casumo allowed an accountant to take free tickets to Wembley because of her VIP status at the same time that she was losing around £125,000 on their sites. He said it was ‘not fair’ that his betting was restricted whilst she was encouraged to keep betting because she was a loser. It matched the accusation of Chappell that a customer rated 2.0 or over would be ‘encouraged to lose more’ with the use of promotions and invites to sporting events.

Ladbrokes Deny Wrongdoing

For their part, Ladbrokes were quick to point out that the documents leaked were five years old and were to do with a third-party business that the company was considering working with at the time. They said that it did not reflect the way that they operate in the present day and bore ‘no relevance’ to their ‘current trading platform’.

They pointed to the fact that 99% of bets placed by customers in their betting shops, on their mobile application and via their website are placed as requested, with just a ‘minority of customers’ given restrictions for the purposes of ‘risk management’. They also painted other operators with the same brush that they were being accused of using, stating that stake factoring was common in the industry and a practice that ‘the majority of betting operators’ also use.

The Gambling Commission Is Likely To Investigate

Regardless of the veracity of the somewhat mixed claims by Ladbrokes that the leaked documents were from five years ago and that it was a practice employed by most bookmakers, the UK Gambling Commission is liable to launch an investigation into the company.

In recent times the UKGC has begun to clamp down on bookmakers believed to be violating the consumer protection guidelines and regulations laid down in the licensing agreement that any gambling company doing business with customers in the United Kingdom has to agree to sign up to.

If the UKGC finds that Ladbrokes have indeed been profiling customers and stopping successful punters from placing bets at the same time as encouraging less successful ones from placing wagers then it’s likely that they’ll come down hard on the British company. It comes at a time when they have begun to close stores all around the country because of the reduction in stake of Fixed Odds Betting Terminals, meaning that their fleet of around 3,500 stores is diminishing in order to cope with the loss of income previously provided by FOBTs.