William Hill Issued With £19.2 Million Fine BY UKGC For Serious Failings

The United Kingdom Gambling Commission has issued William Hill with the largest penalty the organisation has ever issued. The UKGC confirmed that the William Hill Group had been told to pay £19.2 million because of failures by brands that come under the William Hill banner.

Of that, £12.5 million is owed by WHG (International), £3.7 million has been levied against Mr Green and the William Hill Organisation, which is responsible for in excess of 1,300 betting shops around the UK, will pay £3 million. The fines come after serious failures were found to have happened in the group.

There were weak anti-money laundering controls put in place by the various companies owned by William Hill, as well as a failure to protect customers. One of the cases flagged up by the Gambling Commission saw a consumer able to spend £23,000 within 20 minutes of having opened their account, without any checks on them being carried out.

The failings were so bad that the UKGC ‘seriously considered’ suspending William Hill’s licence altogether. The issues took place between the start of 2020 and October 2021, which was before William Hill was bought by 888 Holdings.

What Happened

Any gambling company that operates in the United Kingdom does so under a licence issued by the UKGC.

As part of the licensing conditions, there are certain things that the companies agree to adhere to, with anti-money laundering obligations being high on the list. There is also a sense that businesses will try to protect vulnerable customers, such as those that might be at risk of developing a gambling problem. When it comes to money laundering, William Hill failed to ensure that the money that was being spent by some customers was definitely not being used for this purpose.

In one instance, a customer had been able to deposit and then lose £70,134 in one month. In another, a customer deposited £73,535 and lost £14,068 over a period of four months. In both cases, the large deposits were made without the appropriate checks about the source of the funds being carried out. This goes against the Know Your Customer regulations that companies agree to when they are issued with a gambling licence. As for the vulnerable customer issues, one punter had been able to open a new account and then spend £23,000 within 20 minutes of the account’s opening.

In another case, a customer that was at risk of experience gambling related harm had been able to lose £14,902 in just an hour and ten minutes. A different punter had put a credit limit of £70,000 in place but was able to place a bet of £100,000 immediately after requesting an increase to the credit, when the rules say that any credit increase must take 24 hours before being implemented. Another customer staked £19,000 on one bet, whilst a different one bet £39,324 and lost £20,360 over a 12 day period. In both cases, William Hill failed to ask for evidence of the source of the funds.

Why It Is A Problem

The Chief Executive Officer of the Gambling Commission, Andrew Rhodes, spoke to the BBC in the wake of the fine being issued and outlined why what William Hill did was such a problem. He said,

“The reason we have the requirements to have controls in place is to stop people being able to spend such large amounts of money so quickly without intervention. It may be that they can’t afford it, it may be that it’s a choice they want to make, but we have to have safeguards in place, and William Hill accept that they simply didn’t have them at this time.”

On average, the 22.5 million or so people that gamble each year in the United Kingdom spend about £300 in total. As a result, “if somebody is spending an unusual amount then we would expect to see intervention. That is what should have happened here.”

The fact that it didn’t happen is what has been such an issue, given that the people depositing and betting the money could’ve had a gambling problem, might have stolen the money that they were gambling with or may have been attempting to launder money attained through ill-gotten means. By not checking, William Hill simply had no idea.

Improvements Under 888 Holdings

Whilst Mr Rhodes was keen to stress the poor work of William Hill that led to the fines being issued, he was also quick to point out that there have been improvements under the ownership of 888 Holdings.

The company bought William Hill for £2.2 billion in July of 2022, after which ‘immediate and significant improvements’ were carried out. In fact, it was these improvements that stopped the Gambling Commission from suspending William Hill’s licence in its entirety. Instead, a decision was taken to issue the largest fine that the UKGC had ever issued.

Speaking on the matter, Rhodes said, “When we launched this investigation the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension. However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.” A spokesperson for 888 reiterated this point, saying, “After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan.”

What It Might Mean For 888 Holdings

Whilst the incidents that led to the UKGC issuing the fines might have taken place before 888 Holdings bought William Hill, the onus to pay it falls within the new owners’ remit. For 888, this could have serious consequences. In the quarterly rebalancing, they got knocked out of the FTSE 250 and are no longer big enough to even make the FTSE 350.

Since January, 888 Holdings’ share price has halved. At its highest point over the previous 52 weeks it stood at 251.80, but as of lunchtime on the 28th of March it was 53.40, hitting an 11-year low in the wake of the fine.

Given the fact that the fine is a record amount, overtaking the £17 million that the owner of Ladbrokes and Coral, Entain, was ordered to pay in August of last year, it is no surprise that it is having an impact on the stock market. For 888 Holdings, though, this is serious business. The company was loaded with debt in order to finance the William Hill takeover, which the £19.2 million fine will further exacerbate.

The market never reacts well to such fines, so it might well emerge in the next few days that 888 Holdings is looking to sell off certain aspects of the company in order to ensure that it remains afloat.