Betway Ordered To Pay Record £11.6m By UKGC For Failing VIP Customers

After an inquiry by the Gambling Regulator, online gaming company Betway decided to pay £ 11.6 m for a number of social responsibility and money laundering violations related to transactions with seven of its high-spending customers following the introduction of a package of steps.

The regulator said the operator had failed to carry out source of funds checks on a’ VIP ‘ customer who deposited over £ 8 m and lost over £ 4 m over a four-year period, in one case. In another, Betway struggled to perform successful connexions in social responsibility with a customer who deposited and lost £ 187,000 in two days.

Betway will pay a total of £ 11.6 million, consisting of £ 5.8 million reimbursement instead of a financial penalty aimed at implementing the National Strategy to Reduce Gambling Harms, and will divest a total of £ 5.8 million, the bulk of which will go to victims where illegal profits have been identified or may fairly be believed to be. The latter figure may rise over the period under a study of the top 25 customers by Betway for each year.

Richard Watson, Gambling Commission Executive Officer, said: “The actions of Betway suggest there was little regard for the welfare of its VIP customers or the impact on those around them.”

He said the case showed why high value customer service by operators has to improve, and why the industry needs to do everything in its power to communicate respectfully with customers.

“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.”

He said the case showed why high value customer service by operators has to improve, and why the industry needs to do everything in its power to communicate respectfully with customers.

The report found that due to a lack of understanding of the needs of individual clients and the source of funds audits, the company permitted £ 5.8 m of money to flow into the business that was actually, or may fairly be suspected of being, proceeds from crime. Much of the money is now being divested and returned to the victims. The regulator audit also found insufficient supervision of management, and inquiries are pending into responsible holders of a personal management licence.

Betway contributed to the following items too:

  • 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 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 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 where appropriate.
  • 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.
  • Ensure that all personal management licence holders, senior management and key control staff undertake outsourced Anti-Money Laundering and social responsibility training.

Gambling Commission Chief Executive Neil McArthur set tough targets for the industry last October as part of a campaign to make gambling safer in Britain. One of those based on high value consumer incentivisation. Working groups led by industry, funded by the Betting and Gaming Board, are also focused on ethical game design and the use of advertisement technologies.

Daub Alderney paid £ 7.1 m for anti-money laundering and social responsibility failures, William Hill paid £ 6.2 m for structural social responsibility and money laundering failures, and Ladbrokes Coral Group paid £ 5.9 m for previous anti-money laundering and social responsibility failures. The largest penalty was given to 888 amounting to £7.8m for failing vulnerable customers.