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UKGC: William Hill Group businesses to pay record £19.2m for failures

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UKGC: William Hill Group businesses to pay record £19.2m for failures
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Three gambling businesses owned by William Hill Group will pay a total of £19.2 million for social responsibility and anti-money laundering failures.

WHG (International) Limited, which runs williamhill. com, will pay £12.5 million, Mr Green Limited, which runs mrgreen. com, will pay £3.7 million and William Hill Organization Limited, which operates 1,344 gambling premises across Britain, will pay £3 million.

Andrew Rhodes, Gambling Commission chief executive, said: “When we launched this investigation the failings we uncovered were so widespread and alarming serious consideration was given to licence suspension.

“However, because the operator immediately recognised their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history.”

Today’s action comes just a week after the Commission fined two operators owned by Kindred Group plc a combined £7.2 million and is the largest enforcement case taken on by the regulator. The previous largest was £17 million action taken against Entain in August last year.

Since the start of 2022 the Commission has concluded 26 enforcement cases with operators paying over £76 million because of regulatory failures.

Mr Rhodes said: “In the last 15 months we have taken unprecedented action against gambling operators, but we are now starting to see signs of improvement. There are indications that the industry is doing more to make gambling safer and reducing the possibility of criminal funds entering their businesses.

“Operators are using algorithms to spot gambling harms or criminal risk more quickly, interacting with consumers sooner, and generally having more effective policies and procedures in place.”

Social responsibility failures at William Hill businesses include:

    • Having insufficient controls in place to protect new customers, and to effectively consider high velocity spend and duration of play until the customer may have been exposed to the risk of substantial losses in a short period:
      • One customer was allowed to open a new account and spend £23,000 in 20 minutes without any checks.
      • Another customer was allowed to open an account and spend £18,000 in 24 hours without any checks.
      • And a third customer was allowed to open a new account and spend £32,500 over two days without any checks. (Mr Green)
    • Failing to identify certain customers at risk of experiencing gambling related harm and failing to carry out checks at an early stage in the customer’s journey – one customer lost £14,902 in 70 minutes. (Mr Green)
    • Failing to identify risk of harm or intervene with certain customers earlier enough – one customer lost £54,252 in four weeks without the operator seeking income evidence, carrying out adequate checks, or using any other effective method to identify risk of harm. (WHG (International) Limited)
    • Having insufficient controls which exposed new or returning customers to the risk of substantial losses in a short period of time – one customer opened his account and lost £11,400 over the first 30 days without being subject to sufficient checks and another customer did not have a telephone interaction until losses reached £45,800. (WHG (International) Limited)
    • Failing to apply a 24-hour delay between receiving a request for an increase in a credit limit and granting it – one customer was allowed to immediately place a £100,000 bet when his credit limit had been set at £70,000. (WHG (International) Limited)
    • Ineffective controls allowed 331 customers to gamble with WHG (International) Limited despite having self-excluded with Mr Green. (WHG (International) Limited)
    • Failing to identify changes in the customer behaviour which should have provoked consideration of whether the customer was experiencing harm – a safer gambling interaction was conducted only after he had placed and had accepted an £18,000 bet (William Hill Organisation Ltd (WH Retail))
    • Having insufficient controls in place to protect new customers, and to effectively consider high velocity spend and duration of play until the customer may have been exposed to the risk of substantial losses in a short period:
      • After its retail premise re-opened following the Covid pandemic lockdown, the operator allowed one customer to lose £10,600 in two days without a safer gambling interaction.
      • Despite being unknown and staking £42,253 in 130 bets over a three-day period, staff did not identify one customer as being at risk of experiencing harms associated with gambling or undertake any customer interactions. (William Hill Organisation Ltd (WH Retail))

Anti-money laundering (AML) failures include:

  • Allowing customers to deposit large amounts without conducting appropriate checks – one customer was able to spend and lose £70,134 in a month, another to lose £38,000 in five weeks and another to lose £36,000 in four days. (WHG (International) Limited)
  • Allowing customers to deposit large amounts without conducting appropriate checks – one customer deposited £73,535 and lost £14,068 in four months (Mr Green)
  • Customers were able to stake large amounts of money without being monitored or scrutinised to a high enough standard – the operator failed to request Source of Funds (SoF) evidence when one customer staked £19,000 in a single bet, did not obtain documentation from a customer who staked £39,324 and lost £20,360 in 12 days, and did not obtain SoF evidence from a customer who staked £276,942 and lost £24,395 over two months. (William Hill Organisation Ltd (WH Retail))
  • Policies, procedures and controls lacked guidance on appropriate action to take following the results of customer profiling and how its findings should be used to establish the appropriate outcome. (WHG (International) Limited) and (Mr Green)
  • Procedures and controls lacked hard stops to prevent further spend and mitigate against money laundering risks before customer risk profiling is completed. (WHG (International) Limited) and (Mr Green)
  • AML staff training provided insufficient information on risks and how to manage them (WHG (International) Limited) and (Mr Green)

All £19.2 million will be directed towards socially responsible purposes as part of a regulatory settlement.

Additional licence conditions will also be added to ensure a business board member oversees an improvement plan, and that it undergoes a third-party audit to assess that it is effectively implementing its AML and safer gambling policies, procedures and controls.

“The settlement relates to the period when William Hill was under the previous ownership and management. After William Hill was acquired, the company quickly addressed the identified issues with the implementation of a rigorous action plan.

“The entire Group shares the GC’s commitment to improve compliance standards across the industry and we will continue to work collaboratively with the regulator and other stakeholders to achieve this. – 888 spokesperson

 

Compliance Updates

Romania Bans Gambling Venues in Small Towns and Villages

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Romania has announced a ban on gambling venues in small towns and villages with populations of less than 15,000 residents.

What’s known as the “law of slot machines” was passed by deputies in the lower house of parliament. “It is the first law adopted in Parliament in 30 years against this mafia that has controlled the political world until now,” said Alfred Simonis, the leader of the Social Democrats.

“Right now we are fighting an industry that has a total turnover of €10-12 billion.”

Industry figures complain they were not consulted, and hope that the authorities will control the black market as they promised.

Despite the unanimous vote, there was some dissent within the chamber. Two opposition parties that want to ban the “scourge” of gambling outright accuse the government of collusion with the gaming sector for not taking a stronger position.

On another front Ionut Mosteanu, the leader of the opposition USR, questioned how lawmakers had set the threshold.

“They thought that slot machines only damage 15,000 people,” he said. “There was not even a debate to see how many townships qualify for this 15,000. Why not 16, 17, why not two million and you would ban them definitively?”

Gambling venues have become ubiquitous across Romania over the last few decades. The National Gaming Office, the state body that monitors and approves the sector, has registered 12,000 sports betting, bingo, casino, lottery rooms.

The state collects taxes from gambling venue licenses and online ticket sales as from the amount betting houses spend on advertising.

There are no recent data to indicate how many people in Romania are addicted to gambling. The last survey was conducted in 2016, and found that there could be around 100,000 addicted people across the country. The number today could be much higher.

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Compliance Updates

Bet on Compliance: Navigating the Stakes with the UK’s Affordability Checks

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By Isabelle Zanzer, Head of Regulatory Content at ComplianceOne Group

Feeling like the deck is stacked against you with all these talks of financial checks in gambling? Wondering if this new game plan will leave your privacy on a losing streak? If so, no need to bet on uncertainty anymore. We’re here to deal you in on the UK’s latest gamble towards responsible betting. Let’s shuffle through the details and lay our cards on the table, as we make sure you’re holding a winning hand in understanding what’s in play. Ready to roll the dice and dive in? Follow me.

On July 26, 2023, the UK Gambling Commission launched consultations on proposed reforms in the Gambling White Paper, focusing on areas like direct marketing, age verification, game design, and financial risk checks. This article delves into the latter, highlighting new financial vulnerability and risk assessments to safeguard customers.

The UK’s consultation introduces two checks for gambling: light-touch financial vulnerability checks and detailed financial risk assessments. The first tier of checks is designed to identify financial vulnerabilities such as bankruptcy orders or significant debts, using publicly available data. The second tier involves enhanced financial risk assessments triggered by significant losses, requiring more comprehensive scrutiny of a customer’s financial situation.

Thus, in simple terms, what is going to happen at the heart of the UKGC’s new measures are two-tiered affordability checks designed to assess the financial vulnerability and risk of consumers engaging in online gambling. The first tier involves unintrusive checks that will be triggered when a customer reaches a specified net loss within a rolling period, using publicly available data to identify potential financial vulnerabilities. To dive a little deeper, this check will be conducted if a customer either has net losses of £125 in a rolling 30 days or £500 within a rolling 365 days. It would need to include “at a minimum a customer-specific public record information check for significant indicators of potential financial vulnerability”, including whether the customer is subject to things such as a bankruptcy order, county court judgment, or individual voluntary arrangement. Net loss would be defined as loss of deposited monies with an operator, not counting restacked winnings or bonus funds.

The second tier represents a more detailed assessment of financial risk, which is activated at higher loss thresholds. A comprehensive financial review is required for gamblers with significant losses, examining their financial data including credit status and spending. If third-party data is unavailable, operators may directly seek customer consent for access, ensuring a thorough understanding of financial health.

The gambling industry’s reception of these checks has been cautiously optimistic, particularly regarding the initial, less invasive tier. However, the prospect of more detailed financial assessments has sparked debate, not only among operators but also among consumers wary of privacy infringement.

As the UK gambling sector adapts to these new regulations, the challenge will be to strike an optimal balance between safeguarding consumers and maintaining the operational viability of gambling platforms. The pilot study represents a critical step in this process, offering valuable insights into the practical implications of affordability checks and the potential need for adjustments in response to industry feedback and consumer concerns.

The outcome of the pilot study and subsequent parliamentary debates are pivotal in shaping the future of affordability checks in the UK gambling sector. As operators, regulators, and consumers navigate these changes, the overarching goal remains clear: to foster a safer, more responsible gambling environment that protects consumers from financial harm while ensuring the industry’s sustainable growth.

Striking the right balance in the new UK gambling regulations is like walking a tightrope. With the introduction of light-touch and in-depth financial risk assessments, operators may face the challenge of protecting players without overstepping into their privacy. These two-tiered checks aim to shield those at risk, using both public data and deeper financial insights.

The key here for operators will be to navigate these waters carefully, ensuring player safety while keeping the game fair and enjoyable. Now, when trying to find a balancing act, we need to consider the following:

  1. Regulatory Compliance Risk: Reviewing the existing practices against the UKGC’s affordability check guidelines, identifying discrepancies, and recommending changes to align with the new regulations.
  2. Data Privacy and Security Risk: Evaluating the ability to handle and protect sensitive financial data in line with GDPR and other data protection laws.
  3. Operational Risk: Assessing the impact of the new checks on daily operations and customer interactions.
  4. Financial Risk: Analysing the potential financial implications of the affordability checks on revenue and customer base.
  5. Reputational Risk: Considering the public and customer perception of the affordability checks, especially regarding privacy concerns, the key here, like in all relationships, is communication. For example, it is estimated that just the very highest spending 3 percent of accounts would undergo financial risk assessments. Most financial risk assessments – at least 80 percent – would be carried out through credit reference agencies. The checks are expected to be frictionless and not interrupt the customer journey unless concerns are raised. It is estimated that a further 10 percent of risk assessments will be done through limited data-sharing through third-party open-source banking, which is similarly straightforward from a customer perspective.

Finding this balance involves a tailored approach as one offered by ComplianceOne group, whereby operators can personalize checks based on individual player profiles, ensuring those at higher risk receive the attention they need while others continue to enjoy their play with minimal interruption. It’s about creating a safety net that catches those in need without trapping everyone else in unnecessary checks. The key to a winning strategy is the execute this balance, and understanding what is at stake: Reputation, Sustainability and Trust.

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Compliance Updates

IOC and UEFA host joint betting integrity workshop

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© IOC/Greg Martin
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Sports betting entities and international federations joined UEFA and the International Olympic Committee (IOC) on 11 April for a full-day workshop focused on how sport and the sports betting industry can work together to fight match-fixing. Co-organised by the IOC and UEFA, and held at Olympic House in Lausanne, the workshop explored opportunities for cross-sector collaboration with a focus on integrity exchange in support of the upcoming Olympic Games Paris 2024 and the UEFA Euro 2024.

The workshop kicked off with presentations by the Olympic Movement Unit on the Prevention of the Manipulation of Competitions (OM Unit PMC) and UEFA’s Anti-Match-Fixing Unit, exploring each team’s strategy for combatting match-fixing, engaging with the sports betting industry, and detecting and investigating potentially fraudulent betting activity.

UEFA promotes integrity through dedicated education, prevention, and awareness raising programmes and by detecting, investigating, and sanctioning match-fixing. Collaboration with stakeholders within football, particularly the network of integrity officers who work for UEFA’s 55 member associations, as well as the wider sports community is vital to this work.

UEFA upholds the integrity of all UEFA competitions via tailored, competition-specific integrity measures. Building on the integrity success of previous UEFA competitions, UEFA’s approach for EURO 2024 will feature close collaboration with host and participating nation stakeholders, public authorities, and sports betting entities as well as real-time betting market monitoring. Our secure UEFA integrity website will allow players, referees, officials, and members of the public to report suspected cases of match-fixing confidentially and anonymously. During the workshop, UEFA shared its competition risk assessment and mitigation strategy and explained the escalation, triage, and assessment approach for any potential integrity concerns.

“Sport alone cannot eradicate match-fixing. We must work together – raising awareness, sharing information, ensuring robust prevention and detection systems are in place – to protect sport and athletes. During the UEFA EURO 2024, our Germany-based staff (supported by the entire Anti-Match-Fixing Unit based in Nyon) will work hand-in-hand with betting integrity entities, betting operators and regulators, public authorities, and the national associations.” Vincent Ven, Head of Anti-Match-Fixing at UEFA

“The main objective is to ensure robust 24/7 monitoring of the competition in compliment to our dedicated prevention and education programme for all participating athletes and officials. UEFA’s multi-stakeholder Anti-Match-Fixing Assessment Group will manage pre and in-competition monitoring, ensuring that UEFA can immediately review and address any potential integrity threats to the tournament.”, Ven added.

“Collaboration is essential. During the upcoming Olympic Games in Paris, we will work together with a series of betting operators, associations and major betting regulatory authorities to exchange relevant information about irregular betting patterns or suspicious betting activities detected that might imply competition manipulation.” Friedrich Martens, Head of the OM Unit PMC

Panel discussions with several sport governing bodies and betting integrity entities provided insight into best practices, trends, and success stories from each sector’s perspective, whilst two betting operators took the floor to share examples of recent fruitful cooperation with UEFA and the IOC on prevention and investigations.

The afternoon featured frank discussion regarding how to enhance cooperation between sport and sports betting entities, recent trends in sports betting and their potential impact on sport integrity, and how to improve information sharing in support of match-fixing detection and investigation.

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