The UK Gambling Commission has penalised Entain Group £17m in its largest ever punishment and warned the company that “further serious breaches” could lead to licence revocation.
Entain will pay regulatory settlements of £14m for for social responsibility and anti-money laundering failings at its online Ladbrokes, Coral and Foxy Bingo operations and £3m for failures at its Ladbrokes Betting and Gaming unit, which runs 2,746 betting outlets in Great Britain, the Gambling Commission said today (August 17).
The regulator’s investigation uncovered “serious failures”, Entain’s second set of “completely unacceptable” AML and safer gambling violations, said chief executive Andrew Rhodes.
“They should be aware that we will be monitoring them very carefully and further serious breaches will make the removal of their licence to operate a very real possibility,” he said. “We expect better and consumers deserve better.”
“Operators are reminded they must never place commercial considerations over compliance,” Rhodes said.
In July 2019, Entain, then called GVC Holdings, was penalised £5.9m for AML and social responsibility failings at Ladbrokes and Coral.
Entain will also be required to make sure a board member oversees an improvement plan and hold a third-party audit to ensure its compliance.
Violations included allowing players whose accounts were restricted on one brand to open multiple accounts on other brands and allowing online gamblers to stake large amounts of money without adequate source of funds and timely due diligence checks, the regulator said.
Social responsibility failures included conducting just one chat interaction with an online player who habitually gambled overnight during an 18-month period in which the player deposited more than £230,000, the commission said.
One online gambler who was blocked at Coral for spending £60,000 in a year for failing to provide source of funds details was immediately allowed to open a Ladbrokes account and deposit £30,000 in one day, the regulator wrote.
One retail customer was not given safer gambling reviews despite staking nearly £30,000 and losing more than £11,000 in one month.
Retail staff failings included not flagging for safer gambling reviews one player who was known to be a delivery driver who had lost £17,000 in a year, and another who was allowed to stake nearly £175,000 and lose nearly £28,000 over a year without intervention, the regulator said.
AML failures included neglecting to conduct adequate risk assessments of the potential for the online business being used for money laundering or terrorist financing, according to the Gambling Commission.
At times, the company relied too heavily on the fact that players were recycling winnings rather than conducting adequate checks, the regulator said.
Some online players were allowed to deposit large sums without sufficient source of funds checks, with one gambler being allowed to deposit £742,000 over 14 months without appropriate checks and another who lived in social housing was allowed to deposit £186,000 in six months without adequate reviews.
In some cases, Entain was slow to conduct enhanced due diligence checks, with one player allowed to deposit £525,000 between December 2019 and October 2020 before the account was closed due to the player not supplying source of funds proof.
The company also relied too heavily on open-source information, as one player was allowed to deposit £141,000 over the same period, but it took until August of that year before source of wealth was checked in any way other than open-source data, the regulator wrote.
One retail player was also allowed to stake £168,000 on betting shop terminals over eight months before any due diligence checks were made, the commission said.
“Entain accepts that certain legacy systems and processes supporting the operations of its British business during 2019 and 2020 were not in line with the evolving regulatory expectations of the commission in respect to aspects of social responsibility and anti-money laundering safeguards,” the company said in a statement.
“However the group also notes the commission's statement that it found no evidence whatsoever of criminal spend within Entain's operations.”
Aggravating factors in the punishment included the serious nature of the violations and that there were repeated failures within the group, the regulator said.
The nature of the violations may mean that other players could have been affected that the Gambling Commission did not review, it said.
Finally, given how significant violations were, senior management should have been aware of governance issues, the regulator wrote.
Mitigating factors included that Entain undertook an early remedial action plan and it met timetables for providing data for the investigation.
The review was launched on November 11, 2020, the commission said.