Recent action we've taken against gambling businesses

Investigation of failures in player protection at PTES

The Gambling Commission published the findings of an investigation into PT Entertainment Services (PTES) who used to trade as winner.co.uk and titanbet.co.uk. The investigation uncovered systemic failures in player protection.

In March 2019 the regulator started an investigation after being contacted by the family of a man who tragically took his own life in April 2017 aged 25.

Despite PTES surrendering its licence during the investigation, the Commission decided that it was in the public's best interest to complete the investigation and publish its findings. The investigation identified serious systemic failings in the way that PTES managed its social responsibility and anti-money laundering processes.

The Commission found that the operator failed to carry out any reasonable gambling customer interactions with the young man, despite being aware that several of his card transactions had been declined. PTES also provided him with VIP status without verifying that he could afford to spend the amount of money he was playing with. All of which are serious and unacceptable failings.

The investigation found other general failings in the way PTES interacted with it's highest spending customers. If the licence had not been surrendered, the Commission would have imposed a financial penalty of £3.5million and would have considered if other sanctions were appropriate.

The Commission is continuing to investigate the role played by key individuals at PTES who still hold personal licences, and will take any appropriate action following completion of further investigations.

Neil McArthur, the Commission’s Chief Executive, said: “This is a tragic case which came to light after I was contacted by the family of the young man who very sadly took his own life. I want to thank them for their bravery in bringing his case to our attention and we are grateful for the way they have worked with us in such terrible circumstances so that we could understand what happened.”

“Although PTES has ceased trading we decided to complete our investigation and publish our findings, as the lessons from this tragic case must be learned by all operators.

“Our investigations into the role played by key individuals at PTES are continuing. As such, it would be inappropriate to say more about the specific case at this time.

“This case – like so many others we have seen – illustrates why the management of so-called ‘high value customers’ has to change. Operators must do everything in their power to interact with customers responsibly. We will shortly be opening a consultation to make permanent changes to the way operators recruit and incentivise high value customers.’’

Three senior manager departures and £13m sanction at Caesars

The Gambling Commission announced that Caesars Entertainment UK Limited is to pay £13 million and must implement a series of improvements following a catalogue of social responsibility, money laundering and customer interaction failures including those involving ‘VIPs’.

As a result of this investigation three senior managers at the company surrendered their personal licences and the Regulator’s investigations into Personal Management Licence holders are ongoing.

Caesars Entertainment is a land-based gambling business which operates 11 casinos across Britain. They are to pay £13 million after a Commission investigation found serious systematic failings in the way the company took decisions about VIP customers between January 2016 and December 2018. All £13 million from this case will be directed towards delivering the National Strategy to Reduce Gambling Harms.

Social responsibility failings included:

• Inadequate interaction with a customer who was known to have previously self-excluded and lost £240,000 over a 13-month period
• Inadequate interaction with a customer who lost £323,000 in a 12-month period and had displayed signs of problem gambling, which included 30 sessions that exceeded five hours
• A customer was allowed to lose £18,000 in a year despite identifying herself as a self-employed nanny and informing staff that her savings had been spent. She also informed staff that she was borrowing money from family and using an overdraft facility to fund gambling activities
• Inadequate interaction and source fund checks on a customer who identified as a retired postman and lost £15,000 in 44 days.

Money laundering failings included:

• The operator did not carry out adequate source of funds checks on a customer who was allowed to drop around £3.5 million and lose £1.6 million over a period of three months
• The operator did not obtain adequate evidence of source of funds for a politically exposed person (PEP) who lost £795,000 during a 13-month period
• The operator did not carry out enhanced customer due diligence (ECDD) checks on a consumer who lost £240,000 over a 13-month period
• The operator did not carry out adequate source of funds checks on a customer who identified as a waitress and was allowed to buy-in £87,000 and lose £15,000 during a 12-month period.

Neil McArthur, Chief Executive of the Gambling Commission, said: “We have published this case at this time because it’s vitally important that the lessons are factored into the work the industry is currently doing to address poor practices of VIP management in which we must see rapid progress made.

“The failings in this case are extremely serious. A culture of putting customer safety at the heart of business decisions should be set from the very top of every company and Caesars failed to do this. We will now continue to investigate the individual licence holders involved with the decisions taken in this case.

“In recent times the online sector has received the greatest scrutiny around VIP practices but VIP practices are found right across the industry and our tough approach to compliance and enforcement will continue, whether a business is on the high street or online.

“We are absolutely clear about our expectations of operators - whatever type of gambling they offer they must know their customers. They must interact with them and check what they can afford to gamble with - stepping in when they see signs of harm. Consumer safety is non-negotiable.”

Betway to pay £11.6m for failings linked to 'VIP' customers

Online gambling business Betway is to pay £11.6 million, as well as implementing a package of measures, for a series of social responsibility and money laundering failings linked to dealings with seven of its high spending customers.

In one instance, the operator failed to carry out source of funds checks on a ‘VIP’ customer who deposited over £8 million and lost over £4 million during a four-year period. In another, they failed to carry out effective social responsibility interactions with a customer who deposited and lost £187,000 in two days.

The investigation found that as a result of a lack of consideration of individual customers affordability and source of funds checks, the operator allowed £5.8 million of money to flow through the business which has been found, or could reasonably be suspected to be, proceeds of crime. The majority of this money will now be taken and returned to victims.

The regulator probe also revealed inadequate management oversight and investigations into responsible Personal Management Licence holders are ongoing.

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.”

He said: “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.”

Last October Gambling Commission Chief Executive Neil McArthur set the industry tough challenges as part of a drive to make gambling in safer in Britain. One of those challenges focused on the incentivisation of high value customers.

Industry-led working groups, supported by the Betting and Gaming Council, are also focusing on ethical game design and the use of advertising technology.

Mr Green to pay £3m for regulatory failures

A gambling operator is to pay £3 million as part of the Gambling Commission’s targeted investigation into online casinos.

Mr Green is the ninth gambling business to face action as part of a regulator probe that has led to more than £20 million in penalty packages since 2018.

Since the enforcement activity began, six operators have surrendered their licence and can no longer transact with consumers in Britain. During the course of investigations into the nine most serious operating licence cases the Commission examined the actions of 22 individual Personal Management Licence holders. Of these, six surrendered their licence, six received a formal warning, one received an advice to conduct, seven are still ongoing and no further action was taken against two.

As part of the penalty Mr Green will pay £3 million to the National Strategy to Reduce Gambling Harms because it failed to have effective procedures aimed at preventing harm and money laundering.

As a result of these failures Mr Green:

• did not carry out social responsibility interaction with a customer who won £50,000, gambled it away and deposited thousands more pounds
• took ten year old evidence of a £176,000 claims payout as satisfactory evidence of source of funds for a customer who deposited over £1 million
• accepted a photograph of a laptop screen showing currency in dollars on an alleged crypto trading account as adequate source of funds.

Richard Watson, Gambling Commission Executive Director, said: “Our investigation uncovered systemic failings in respect of both Mr Green’s social responsibility and AML controls which affected a significant number of customers across its online casinos.

“Consumers in Britain have the right to know that there are checks and balances in place which will help keep them safe and ensure gambling is crime-free – and we will continue to crack down on operators who fail in this area.”

The online casino enforcement work is in addition to the Commission’s ongoing strategy to make gambling online safer. This has included:

• strengthening online age and identity verification
• enhanced rules and guidance on identifying and interacting with customers who may be at risk of harm
• the banning of credit cards.

The regulator is also pushing the industry to raise standards in the areas of VIP practices, advertising technology and game design, and is currently looking at online stake limits.

Petfre to pay £322,000 for money laundering failures

Petfre (Gibraltar) Limited, trading as Betfred, will make the payment following an investigation by the Gambling Commission.

The investigation revealed that the operator failed to carry out adequate source of funds (SOF) checks on a customer who deposited £210,000, and lost £140,000, of stolen money in a 12-day period in November 2017. A customer being able to deposit and lose such significant amounts in such a short period of time clearly indicated failings in the effectiveness of Petfre’s anti-money laundering policies and procedures.

As part of this settlement Petfre will return £140,000 to the identified victim and make a £182,000 payment in lieu of a financial penalty which will be spent on accelerating the delivery of the National Strategy to Reduce Gambling Harms.