Betway Hit With Record £11.6m Fine by UKGC For Regulatory Failing
The UK Gambling Commission has ordered Betway to pay a record £11.6m fine. The regulator stated that Betway had made “systemic and historic” failings in regards to social responsibility and anti-money laundering measures. The charges relate to seven accounts held by high spending, VIP accounts. In the ruling, the UKGC state that Betway failed to perform checks on the legality of funds that a customer deposited.
In one example, a customer managed to deposit £8m in their account, losing £4m in four years. In another case cited by the Commission, a customer funded their account with £187,000 and subsequently lost the full total in just two days. In both cases, no affordability checks were performed on the customer according to the Commission.
Another example mentioned in the Commission’s summary was a customer, who despite being unemployed, deposited £1.7m with the bookmaker and suffered losses over three years of £700,000.
A conclusion of the Gambling Commissions investigation, which took place between 2014 – 2019, was that a sum of £5.8m went through the company’s accounts. Betway’s lack of affordability and source of funds checks led to these funds not being highlighted as suspicious.
The Commission believes these funds were, or could reasonably be suspected as being, from the proceeds of crime. Where this is proven, the victims will benefit from this ruling as the majority of the £11.6m will be returned to those involved.
The Commission also found that Betway’s management failed to provide adequate oversight and confirmed that they were continuing to investigate those in the company who hold personal management licences.
Personal management licences, issued by the regulator, are required if a person is involved in any of the following areas: Overall strategy and delivery of gambling operations, financial planning, control and budgeting, marketing and commercial development, regulatory compliance or gambling-related IT provision and security.
When issued, the holder of the licence has responsibilities under Part 5 of the Gambling Act 2005 for the conduct of staff. Under the statutory conditions applicable to performing management functions, the PML states; ‘The licensee is responsible for a person if the licensee is required, by the terms of their appointment, to take or share responsibility for the conduct of that person and that person performs an operational function in connection with an activity performed in reliance on an operating licence in connection with which the licensee performs the functions authorised by this licence.’
The investigation into Betway centred around seven customer accounts, all designated by the company as VIP accounts. The regulator had suspicions about these accounts, and a subsequent police investigation discovered that the source of funded was via stolen money.
Last year, Ben Jones was convicted of stealing £370,000 from The Cake Decorating Co, where he worked as a wholesale manager. Betway were criticised at the time for failing to perform affordability checks. His employees said they were considering subsequent legal action on Betway. The Commission has not confirmed if this ruling covers that case or not.
Betway’s CEO, Anthony Werkman, said the operator took full responsibility for the cases and had cooperated fully with the Commission’s investigation. Werkman insisted that as a responsible operator, work had already taken place on the firm’s compliance systems, policies and processes and these improvements would continue. The CEO highlighted the fact that Betway had since disbanded its VIP scheme and introduced tighter controls.
Despite Werkman’s insistence that changes had been made at Betway, the Gambling Commission was scathing in comments made about the operator. 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.– Richard Watson, Gambling Commission.
Watson added that the cases highlighted in this ruling demonstrated why the operators’ management of high-value customers must change. He added that the Commission had set tight deadlines on when they expect to see progress and warned that operators who fail to comply would face further action.