BUSINESS

Ladbrokes under fire for VIP gambling with stolen funds

TAGs: GVC Holdings, Ladbrokes, UK Gambling Commission

ladbrokes-vip-gambler-stolen-fundsUK-listed gambling operator GVC Holdings saw its share price fall on Monday following a report into its Ladbrokes brand’s efforts to hide misdoings from UK regulators.

On Monday, the Guardian reported that Ladbrokes paid nearly £1m to five individuals whose money was stolen by a Ladbrokes’ VIP customer who then lost the stolen sums gambling with Ladbrokes. As a condition of this payment, Ladbrokes required the five recipients to “agree not to bring any complaint or make any report to any regulator in relation to the claim.”

A spokesperson for the UK Gambling Commission (UKGC) told the Guardian that the regulator was “enquiring into this matter to ascertain the full circumstances.” The spokesperson added that it expected its licensees to “to work with us in an open and cooperative way including the need to disclose to us anything which we would reasonably expect to know.”

The Guardian also reported seeing text messages and other evidence indicating that Ladbrokes lavished the VIP customer with perks, including four-figure credits to his gambling account, air travel to attend high-profile sports events and luxury hampers as Christmas gifts.

Worse, texts indicate that a Ladbrokes rep assigned to the gambler’s account made only token efforts to comply with UKGC ‘source of funds’ rules, and continued to shower the customer with incentives during a five-month hiatus from wagering, prior to which the gambler claims to have told the account rep that he was struggling with gambling addiction.

The gambler was reportedly a signatory to the settlement agreement Ladbrokes struck with the victims, but he said he was breaking the confidentiality requirement based in part on his belief that Ladbrokes “has no respect for their codes of practice.”

The Racing Post quoted a Ladbrokes spokesperson saying it was “a standard provision of such settlement agreements that the parties keep its content confidential.” However, the spokesperson said the company “notified the [UKGC] of this case at the relevant time and will continue to co-operate with our regulator.”

Last week, the Guardian reported that several of the gamblers’ victims were pursuing legal remedies against UK bookmakers William Hill and Paddy Power Betfair, to whom the same gambler reportedly lost a total of over £1.5m in stolen funds. Paddy Power’s role in this debacle was previously detailed in the £2.2m fine that the UKGC imposed on the company in October.

Investors reacted to Monday’s report by pushing down GVC’s share price nearly 5% at the close of trading. The UKGC has dramatically increased regulatory penalties on its licensees this year and Ladbrokes was already being probed for (a) allowing a betting shop customer to take out high-interest loans over the phone in order to keep playing their fixed-odds betting terminals, and (b) violating data protection rules by leaving unshredded customer account records in a garbage bag.

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