Systemic senior management failure to protect consumers and prevent money laundering will result in William Hill Group (WHG) paying a penalty package of at least £6.2m.
A Gambling Commission investigation revealed that between November 2014 and August 2016 the gambling business breached anti-money laundering and social responsibility regulations.
Senior management failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money laundering and social responsibility processes were effective. This resulted in ten customers being allowed to deposit large sums of money linked to criminal offences which resulted in gains for WHG of around £1.2m. WHG did not adequately seek information about the source of their funds or establish whether they were problem gamblers.
WHG will pay more than £5m for breaching regulations and divest themselves of the £1.2m they earned from transactions with the ten customers. Where victims of the ten customers are identified, they will be reimbursed. If further incidents of failures relating to this case emerge, WHG will divest any money made from these transactions.
WHG will also appoint external auditors to review the effectiveness and implementation of its anti-money laundering and social responsibility policies and procedures and share learning with the wider industry.
Neil McArthur, Executive Director, said: “We will use the full range of our enforcement powers to make gambling fairer and safer.
“This was a systemic failing at William Hill which went on for nearly two years and today’s penalty package – which could exceed £6.2m - reflects the seriousness of the breaches.
“Gambling businesses have a responsibility to ensure that they keep crime out of gambling and tackle problem gambling - and as part of that they must be constantly curious about where the money they are taking is coming from.”
Examples of WHG’s failures include (all figures are approximate):
- A customer was allowed to deposit £654,000 over nine months without source of funds checks being carried out. The customer lived in rented accommodation and was employed within the accounts department of a business earning around £30,000 per annum.
- A customer was allowed to deposit £541,000 over 14 months after the operator made the assumption that the customer’s potential income could be £365,000 per annum based on a verbal conversation and without further probing. The reality was that the customer was earning around £30,000 a year and was funding his gambling habit by stealing from his employer.
- A customer who was allowed to deposit £653,000 in an 18 month period activated a financial alert at WHG. The alert resulted in a grading of ‘amber risk’ which required, in accordance with the licensee’s anti-money laundering policy, a customer profile to be reviewed. The file was marked as passed to managers for review but this did not occur due to a systems failure. The customer was able to continue gambling for a further six months despite continuing to activate financial alerts.
- A customer was identified by WHG as having an escalating gambling spend with deposit levels exceeding £100,000. WHG interacted with the customer seeking assurance that the customer was ‘comfortable with their level of spend’. After receiving verbal assurance and without investigating the wider circumstances the operator continued to allow the customer to gamble. In our view that interaction was inadequate and did not review the customer’s behaviour sufficiently to identify if their behaviour was indicative of problem gambling.
- A customer exceeded deposits of £147,000 in an 18 month period with an escalating spend and losses of £112,000. WHG systems identified the issue but its only response over a 12 month period was to send two automated social responsibility emails. Our view is that this action alone was not sufficient given the customer’s gambling behaviour coupled with the severity of the losses.
All operators are advised to read William Hill International: Regulatory Settlement for further details and lessons to be learned.
Notes to editors
- Our approach to enforcement.
- More information about how we regulate the gambling industry.
- Useful statistics on the gambling industry
- Earlier this month the Commission wrote to all online casino operators to raise concerns about the sector’s approach to anti-money laundering and social responsibility.
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Posted on 20 February 2018