Betway to pay £11.6million for AML and social responsibility failings linked to VIP customers

The Gambling Commission has announced the terms of a regulatory settlement under which online casino operator Betway Limited will:

  1. Pay £5.8million in lieu of a financial penalty which will be directed towards delivering the National strategy to Reduce Gambling Harms.
  2. Make a divestment totalling £5.8million, the majority of which to go to victims where it has been found, or could reasonably suspected to be, proceeds of crime.
  3. Undertake the following within a reasonable time and report the findings to the Commission:
    • An independent review of current policies and processes, its operation, resourcing, quality control and oversight
    • A compliance led review of all current/active UK customers who have not been reviewed in the past six months and require review applying its current processes for Anti-Money Laundering and social responsibility.  It will dip-sample to test the robustness of the review
    • A full assessment of its top 25 customers by gross gambling yield (“GGY”) and top 25 customers by deposit for years 2015, 2016, 2017 and 2018 to consider whether any of the failings identified are evidenced and if so, to divest the GGY accordingly
    • Review any new high or higher risk customers as may be identified by the Commission.  Any recommendations arising out of these reviews will be fed back into the improvements that could be made to current processes and dealing with divestment
    • A review of the next 12-month compliance development road maps.
  4. Agree to the publication of a statement of the facts in relation to this case.
  5. Pay £18,940 towards the Commission’s costs of investigating the case.

It is made clear in the public statement (that you can download below) that UK licensed B2C gambling operators should consider the following questions:

  • Are your policies and procedures for identifying high risk customers for AML and SR effective?
  • Have you adequately resourced your AML and SR departments, so your staff are able to put your policies and processes in place for all customers at all times? 
  • Are you recording all customer interactions, including decisions not to interact with customers, and are these records available for colleagues to refer to when making decisions?
  • Are your customers providing documentation to support their level of spend and loss, and not simply giving verbal or email assurances, for example?

The Commission’s announcement of this latest public statement reads as follows:

Online gambling business Betway is to pay £11.6m, alongside implementing a package of measures, for a series of social responsibility and money laundering failings linked to dealings with seven of its high spending customers.

In one instance, the operator failed to carry out source of funds checks on a ‘VIP’ customer who deposited over £8m and lost over £4m during a four-year period. In another, Betway failed to carry out effective social responsibility interactions with a customer who deposited and lost £187,000 in two days.

The investigation found that as a result of a lack of consideration of individual customers affordability and source of funds checks the operator allowed £5.8m of money to flow through the business which has been found, or could reasonably be suspected to be, proceeds of crime. The majority of this money will now be divested and returned to victims.

The regulator probe also revealed inadequate management oversight and investigations into responsible Personal Management Licence holders are ongoing.

Richard Watson, Executive Director at the Gambling Commission, said:

“The actions of Betway suggest there was little regard for the welfare of its VIP customers or the impact on those around them.”

Mr Watson said today’s case illustrated why operators’ management of high value customers must change and why the industry must do everything to interact with customers responsibly. He said:

“As part of our ongoing programme of work to make gambling safer we are pushing the industry to make rapid progress on the areas that we consider will have the most significant impact to protect consumers. The treatment and handling of high value customers is a significant piece of that work and operators are in no doubt about the need to tackle the issue at speed. We have set tight deadlines for when we expect to see progress and if we do not see the right results then we will have no choice but to take further action. This case highlights again why progress needs to be made.”

Gambling Commission Chief Executive Neil McArthur set the industry tough challenges last October as part of a drive to make gambling in Britain safer. One of those focussed on the incentivisation of high value customers.  Industry-led working groups, supported by the Betting and Gaming Council, are also focusing on ethical game design and the use of advertising technology.

The above reference to “tough challenges” relates to a speech that Neil McArthur delivered at a CEO Breakfast Briefing in London on 2 October 2019, on which we have previously reported here.

Download article PDF: Betway Ltd public statement 12.04.20