BUSINESS

Paddy Power Betfair fined £2.2m for social responsibility failures

TAGs: Betfair, paddy power betfair, UK Gambling Commission

paddy-power-betfair-fined-social-responsibility-failuresUK-listed gambling operator Paddy Power Betfair (PPB) has been penalized £2.2m after some of its customers gambled with stolen money and other customers’ problem gambling behavior went unchallenged.

On Tuesday, the UK Gambling Commission (UKGC) announced PPB’s trip to the regulatory woodshed, based on the company’s failure to “adequately interact with customers who were displaying signs of problem gambling” and the failure to “adequately carry out anti-money laundering [AML] checks.”

The AML shortcomings occurred at PPB’s exchange betting service Betfair, through which “significant amounts of stolen money” flowed, according to UKGC exec director Richard Watson. The moneys were wagered in 2016 by two Betfair customers, both of whom displayed “signs of problem gambling on numerous occasions.”

One of these Betfair punters was gambling with money stolen from his employer, described in the settlement as “a charity.” The Guardian identified the charity as the Birmingham Dogs Home and the Betfair customer as the charity’s former boss Simon Price, who was sentenced to five years in prison last December for stealing £900k over a four-year period.

Other responsible gambling gaffes saw PPB cop to “weaknesses in source of wealth and social responsibility checks” in its dealings with three other retail and online customers.

The settlement reached with the UKGC requires PPB to make a £1.7m payment to the regulator, and to divest itself of £500k, a portion of which will be returned to the charity from which it was stolen. PPB will also pay £50k to cover the cost of the UKGC investigation.

The UKGC’s Watson said all the above failings “stem from one simple principle – operators must know their customer.” Only by knowing their customers and asking the right questions can operators “place themselves in a strong position to meet their anti-money laundering and social responsibility obligations.”

Ironically, investors appear unconcerned by the UKGC’s rapping of PPB’s knuckles, as the stock closed out Tuesday’s trading up nearly 4.5%. There truly is no such thing as bad publicity, apparently.

This is the second punishment announced by the UKGC in as many days, following Monday’s £94k penalty imposed on small-scale bookmaker Mark Jarvis Ltd. Last week, Rank Group was penalized £500k for failing to protect a VIP gambler from himself.

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