The gambling operator Paddy Power Betfair is to pay a massive £2.2-million penalty package for its failures to protect customers from gambling-related harm and to take proactive measures to top stolen money from being used to fuel problem gambling behaviour.
The UK Gambling Commission (UKGC) held an investigation, which found that the company did not interact adequately with customers who were showing signs of a gambling addiction. As found by the Commission, Paddy Power Betfair did not properly carry out anti-money laundering checks. The probe of the UK gambling regulatory authority found that the gambling operator’s betting exchange was used by two of the customers, while the company’s online presence and retail premises were used by three more individuals.
Paddy Power Betfair to pay £2.2m penalty package for social responsibility and money laundering failures on its gambling exchange https://t.co/BIKIs4BMJS
— Gambling Commission (@GamRegGB) October 16, 2018
The UKGC Executive Director Richard Watson explained that the significant amounts of stolen money which flowed through the company’s betting exchange was unacceptable. Mr. Watson explained that gambling operators are required to prevent the proceeds of crime from being used for funding gambling activities. He further noted that companies are expected to know their customers in order to properly protect them.
“If they know their customer and ask the right question then they place themselves in a strong position to meet their anti-money laundering and social responsibility obligations.” – Richard Watson, Executive Director at UKGC
Massive Penalty Package to Be Paid by Paddy Power Betfair
Currently, Paddy Power Betfair holds a number of several operating licenses under which allows the company to provide facilities for various betting activities, except for pool betting. The operating licenses of the gambling company also do not allow it to act as a betting exchange (betting intermediary).
The investigation held by the UK Gambling found that Paddy Power Betfair provision 3.4.1(1) violated the social responsibility code which is related to customer interaction. The provision was breached as the company allowed five customers to gamble in spite of the fact that there were signs for gambling addiction. Paddy Power Betfair accepted the accusations that it failed to act accordingly in order to prevent money laundering.
The probe uncovered that the social responsibility and anti-money laundering policy of the gambling company was breached, which affected five customers of the operator’s online betting exchange, retail and online betting services. During 2016, the operator allowed two customers to gamble large sums of stolen money on its Betfair betting exchange. It was found that one of these people had stolen a large amount from their employer. Also in 2016, some social responsibility and AML failings were identified for three off- and online customers of the company.
As mentioned above, Paddy Power Betfair is to pay a regulatory settlement amounting to £2.2 million in line with the UK Gambling Commission’s Statement of principles for licensing and regulation. The penalty package includes a £1,717,121 payment in lieu of a monetary penalty and a £498,508 divestment of the money received. In addition, a £50,045 payment for the investigative expenses will be made by Paddy Power Betfair.
- Author
Olivia Cole
