There has been a series of fines issued by the UK Gambling Commission in recent years. These have frequently surrounded failures in the areas of social responsibility and anti-money laundering (AML). In fact, it is these failures that led to William Hill receiving the vast, record-breaking £19.2 million fine in March of 2023. Yet since that time, other companies have also received fines from the Commission for similar problems.
The start of April saw TGP Europe issued with a £316,250 fine, while May also witnessed a £305,150 penalty issued to Skill On Net. In both June and July of this year, further penalties arrived at the doors of Videoslots Limited and Star Racing Limited, respectively. Now it comes to the time for Betfred to receive another fine from the regulatory body. It’s not the first time this has happened to the company, either. It was only in September of 2022 that Petfre (Gibraltar) Ltd, trading under the Betfred name, received a £2.9 million penalty. Even then, the issues surrounded anti-money laundering and social responsibility failures.
Yet it is now the Done Bros (Cash Betting) Limited company, which also trades as Betfred, which is on the receiving end of a penalty. The £3.25 million fine came about following an investigation conducted by the UKGC, which revealed the social responsibility and AML failures. Done Bros operates over 1,400 betting shops across the United Kingdom. It has agreed to pay the money as part of a settlement with the Gambling Commission.
The Failures Committed by Done Bros
It seems to be a running scenario from company to company in the gambling world. The Commission completes investigations and failures linked to the brands surround AML and social responsibility. The same is true for Done Bros and its land-based betting shops. The social responsibility failures attributed to the company include the following situations:
- Not having sufficient controls in place to protect new customers, nor to monitor high velocity spend and duration of play. Thus, customers were exposed to the risk of substantial losses without any interaction surrounding safer gambling.
- Assuming customers weren’t at risk of harm because they were winning players. As a result, the company failed to carry out any safer gambling interactions on one customer, who staked almost £517,500 in a two-month period.
- Not having evidence of evaluation of the effectiveness of individual customer interactions, as well as a lack of record-keeping, thereby limiting the effectiveness of future interactions.
Regarding anti-money laundering failures, Done Bros was pulled up on the following problems:
- Not having adequate record-keeping, with financial alerts thresholds being set too high.
- Not having consistent protocol and documentation in place surrounding Know Your Customer (KYC) identification and Source of Funds (SoF).
- Putting too much reliance on open-source information. Done Bros should have taken additional steps to corroborate customers’ SoF information as a result.
The report submitted by the Gambling Commission states that the failures occurred at various times between January 2021 and December 2022. Speaking on the situation, Kay Roberts, executive director of operations for the UKGC, 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”.
She went on to state that protections should be in place in relation to both the online and offline sectors.
Done Bros Fine to Go to Socially Responsible Causes
Rather than pay an outright penalty, Done Bros worked out a regulatory settlement with the Commission. This consists, first of all, of a payment of £3,250,000, which is to be directed to socially responsible purposes, and this includes a divestment of £1,052,717. Done Bros also agreed to have the statement of facts relating to this case being published, and to pay the Commission’s costs relating to conducting the investigation in the first place.
The Commission had to consider certain aggravating and mitigating factors when deciding upon an appropriate course of action to undertake. The serious nature of the breaches uncovered were considered, as were the impact on the licensing objectives and the licensee’s senior management needing to be aware of the governance issues. Yet there were mitigating factors that allowed the UKGC to decrease the severity of the measures taken. Done Bros implemented an early action plan to remedy the highlighted failures, and it did this in time with the timetable set out by the Commission. Furthermore, it voluntarily accepted the Commission’s findings, and did so early on.
Granted, the penalty meted out to Betfred isn’t the largest of 2023. Not by far. Yet it does pose questions over how the company is operating in general. It received the £2.9 million penalty at the end of 2022. Yet, Betfred has also suffered from other penalties at the hands of the Commission. In 2016, it received an £800,000 penalty, Petfre (Gibraltar) was issued with a fine of £322,000 in 2019, and now it has another to pay in 2023.
Yet, in comparison to other firms, it has not suffered in as vast a way financially. Other than the William Hill penalty in March of 2023, over the past 24 months, Betfred sits fairly low down. Entain received a £17 million fine in August of 2022, with 888 Holdings on the receiving end of a £9.4 million fine in March of 2022. Kindred Group, InTouch Games, Daub Alderney and Genesis Global have all paid out more than the Betfred group within that timeframe, too. In the case of Entain, the company was even threatened with licence revocation, meaning that it has had to tighten up its operations in a significant way to ensure everything runs conforming to the rules.
Lottery operator Camelot received a fine in March of 2022 of £3.15 million, which sits it just below the Betfred brand. Yet, if you combine the land-based Betfred and online Betfred penalties, they equate to £6.12 million, which pushes the brand up to around the same level of InTouch Games as far as financial penalties are concerned.