The Gambling Commission has today (28 September 2022) announced another multi-million pound financial penalty (plus a warning under section 117(1)(a) of the Gambling Act 2005) on a remote gambling operator for the same type of AML and social responsibility failings that have resulted in similar outcomes for many other operators.
The Commission’s announcement reads as follows:
Petfre (Gibraltar) Ltd – trading as Betfred and Oddsking – fined £2.9m
Petfre (Gibraltar) Limited will pay a £2.87m penalty for social responsibility and anti-money laundering failures.
The operator – which runs betfred.com and oddsking.com – will also receive an official warning for failures at the business.
Leanne Oxley, Gambling Commission Director of Enforcement and Intelligence, said:
“This is a further example of us taking action to investigate and sanction alarming failures. We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance. Where standards do not improve, tougher enforcement will follow.”
Social responsibility failures included:
- There were no controls in place to prevent large levels of high velocity spend by new customers. One customer was allowed to lose £70,000 over a 10-hour period just a day after opening the account
- Setting safer gambling interaction triggers too high and when customers’ spend increased considerably, which can be an indicator of harm, no further safer gambling account review was conducted in a timely manner– one customer was first interacted with when they had deposited £20,700 and lost £10,200 but then the next interaction did not occur until four months later when the customer had deposited £323,715 and lost £69,371.
Anti-money laundering failures included:
- Not fully taking into account the money laundering and terrorist financing (MLTF) risks connected to its business, in particular risks connected to country or geographic area, customers, transactions, and product and services
- Not having appropriate policies, procedures and controls in place to manage and mitigate the MLTF risks, including thresholds that were inadequate, having insufficient information on customers and no evidence of ongoing monitoring prior to initial financial triggers being reached.
- Not ensuring that its policies, procedures and controls were implemented effectively, including not following guidance issued by the Commission and not taking into account any applicable learning or guidelines published by the Commission
- Failing to thoroughly implement the measures described in the Money Laundering Regulations, including failing to identify the MLTF risks to which the business was subject and failing to establish and maintain policies, procedures and controls to manage and mitigate the risks effectively. The operator also provided inadequate employee training, failed to scrutinise transactions to ensure that that they were consistent with their knowledge of the customer and their risk profile, and failed to conduct sufficient anti-money laundering, customer due diligence and source of funds checks.
Decision date: 8 September 2022
Outcomes: Financial penalty and Warning
Details of action
Following a review of the operating licence undertaken against Petfre (Gibraltar) Limited (“the Licensee”), the Commission found that between October 2019 and December 2020 the Licensee:
- breached paragraph 1, 2 and 3 of licence condition 12.1.1 – Anti-Money Laundering (Prevention of money laundering and terrorist financing)
- breached paragraph 1 of licence condition 12.1.2. – Anti-Money Laundering (Measures for operators based in foreign jurisdictions)
- failed to comply with paragraph 1 and 2 of social responsibility code of practice (SRCP) 3.4.1 – Customer Interaction
- failed to act in accordance with ordinary code provision 2.1.1 – Anti-money laundering
In line with the Commission’s Licensing, compliance and enforcement policy statement, the Indicative sanctions guidance and the Statement of principles for determining financial penalties, the Commission has decided to:
- impose a financial penalty of £2,873,750 million under section 121 of the Gambling Act 2005 (the Act)
- impose a warning under section 117(1)(a) of the Act
The Licensee co-operated with the Commission throughout the investigation and took immediate corrective steps to address the identified failings. The Commission’s review of the specific customers identified during the Compliance assessment found no evidence of criminal spend with the Licensee.