Betfred the latest operator to pay an AML failure penalty

red has agreed to pay compensation and a contribution towards social causes of over £800,000, after the Gambling Commission (GC) ruled it failed in its anti-money laundering and social policies.

The GC conducted an investigation after a Betfred customer was jailed for three years and four months for stealing more than £856,000 from their employer, a charge which the individual in question admitted to.

A significant amount of the money had been spent on online gambling, with by far the largest portion being played with Betfred.com.

What has Betfred actually done wrong?

An initial reaction to this case may be: “How could Betfred possibly have known the money the player was staking was stolen? They do not have access to bank records and are not the police?”

The GC made it clear though that Betfred is at fault for not monitoring the player’s high-volume activity closely enough and its provisions for VIP customers were out of line.

When outlining Betfred’s faults in the matter, the GC said: “Betfred failed to keep full records of the evidence and supporting documents it considered as part of its due diligence, contrary to regulation 19 of the Regulations. It stated that its staff had spoken to the customer on a number of occasions and this had contributed to the view that he was a professional gambler.

“No records were retained following these interactions with the customer. Also, there were inadequate records of any customer interaction with the customer. This is also indicative of a lack of adequate due diligence measures.

“After being upgraded to a VIP customer, the customer’s play was not subject to the reactive player monitoring which applied to other customers. Additionally, Betfred’s written policies and procedures made no provisions for how VIP customers, who may be problem gamblers, are identified or managed and the customer was often awarded bonuses of over £1,000 when his balance reached zero.”

Betfred will pay £443,000 to the victims of the crime and a £344,500 penalty to socially responsible causes, as well as the GC’s investigation costs of just over £30,000.

An independent third-party review must be carried out by Betfred, which will look into its anti-money laundering and social responsibility policies.

A Betfred spokesman said: “Betfred notes the findings of the Gambling Commission relating to a historical case of an online customer. We have greatly strengthened our policies and will continue to review and update our anti-money laundering and social responsibility procedures. The Betfred Group remains fully committed to working with the Gambling Commission and the rest of the industry to strengthen existing controls. Responsible gambling is at the very heart of our business.”

This case follows Gala Coral’s settlement of over £846,000 that was paid to the victim of a theft, after the stolen money was laundered through Coral brands, confirmed in April.

The GC also revealed in February that Paddy Power had failed to keep crime out of gambling, resulting in the operator paying £280,000 to socially responsible causes.

Richard Watson, GC programme director, said: “The Commission has now concluded a wide range of cases over the last 10 months leading to around £3.75m in penalty packages. The outcomes and findings in these cases provide a clear signal to operators of the need to learn the lessons from these for social responsibility and money laundering controls, or risk facing tougher sanctions.”