Social responsibility and anti-money laundering are two focuses of the UK Gambling Commission. And in recent times, these areas have led to many gambling operators receiving fines. The latest of these companies is Petfre Limited, which owns Betfred and Oddsking.
The Commission discovered that Petfre had failed in various areas, leading to the £2.87M fine. The operator also received an official warning from the regulatory body. It stands out as another instance of the Commission flexing its power muscles. And the penalties have been coming thick and fast over the past couple of years.
This is something that the Commission has commented on itself, too. Speaking on behalf of the regulatory body, Leanne Oxley, Director of Enforcement said:
“This is a further example of us taking action to investigate and sanction alarming failures”.
She went on to state that the Commission expects Petfre Ltd. to review the case. And further to this, all other licensees should take a look at it, too. This way, they can look and see if they need to make any adjustments and improvements. “Where standards do not improve, tougher enforcement will follow”, she said.
The Areas That Petfre Limited Failed In
Petfre’s failures were also highlighted by the Gambling Commission. And this falls in line with other companies that have recently had fines handed out. When it comes to the Betfred operator, it had issues in the following areas:
- The lack of controls in place to prevent large levels of high velocity spending by newcomers. A single customer was able to lose more than £70,000 in 10 hours. That occurred just one day after they opened their account.
- Having safer gambling triggers set at too high a level. When customers’ spend increased by a considerable amount, no account review was undertaken. Or at least, not in good time. One example saw a customer only interacted with when they had deposited £20,700. They had also lost £10,200 on a Petfre site. Yet the next interaction did not occur until four months later on. By that time, the customer had deposited £323,715 and lost £69.371.
- Not adhering to laws around money laundering and terrorist financing (MLTF). In particular, the risks connected to country or geographic area were not noticed. Others of note include issues in the area of customers, transactions and product and services.
- No appropriate policies or procedures and controls in place relating to MLTF risks. This includes having thresholds that were not appropriate. Customers had access to insufficient information. And there was no evidence of ongoing monitoring before initial financial triggers reached.
- Petfre did not ensure the proper implementation of its policies, procedures and controls. This includes not following Commission-issued guidance.
- Measures described in the Money Laundering Regulations were not implemented. This includes the failure to identify MLTF risks. The operator also didn’t provide adequate employee training. And it failed to scrutinise transactions in a proper way. This led to insufficient anti-money laundering protocol and due diligence checks.
Another Penalty From The UKGC
Petfre Limited is not the first company to receive a UKGC fine. And it won’t be the last. As of late, they seem to be coming thick and fast. Despite the £2.87 million penalty being nowhere near the highest, it will be a bit of a blow to the operator. Mammoth operator Entain received a record-breaking penalty of £17 million in August. This was also due to social responsibility and anti-money laundering failures. Of course, the issues for Entain were much more extreme, as the resulting fine dictates.
The Commission said that Petfre Limited had cooperated throughout the investigation. The operator also took immediate steps to rectify the highlighted issues. And even though money-laundering was an area looked at, it wasn’t all bad. There was no evidence of criminal money in all identified customers.
“We will work with the UK Gambling Commission and continually review all our Anti-Money Laundering and Social Responsibility policies”,
said a spokesperson for Petfre.
Speaking with the Gibraltar Chronicle, Petfre highlighted the lack of criminal activity evidence. The brand continued to say that it has committed to providing a safe gambling setup. The Gibraltar Government Gambling Division has also been working with Petfre. This is to assist in ironing out the issues raised by the investigation. That help was taking place before the announcement of the fine from the UKGC.
Gibraltar’s Gambling Commissioner, Andrew Lyman, had the following to say:
“We are reviewing the individual cases that are subject to this UK settlement which have been judged by the UK Gambling Commission against their codes of practice and their specific interpretations of those codes”.
It was also noted that the case does not reflect the current practices of the operator. In fact, the Commission highlighted continuous improvement on Petfre’s behalf. Especially in the area of anti-money laundering.
Before the £17 million fine that Entain received, 888 Holdings held the record. In March of 2022, 888 received a penalty of £9.4 million from the UKGC. This also came about due to failures in the areas of social responsibility and anti-money laundering. And it marked the second time for this brand. It also had a fine of £7.8 million to pay in 2017 for similar problems.
Entain suffered the most, though. Many were quite surprised that its licence was not revoked by the regulatory body. The Ladbrokes owner did receive a warning over the status of its licence, though.
In 2019, Entain had to pay a penalty of £5.9 million for failings in the same areas. With the operator receiving the £17 million fine on top, there is little doubt it hasn’t done enough. And this puts its licence in jeopardy. One more failure could see Entain kicked out of the UK market for good. Petfre may not be at that level yet. But any penalty from the UKGC serves as a significant warning.