UKGC Slams Ladbrokes Coral With £5.9M in Penalties in Problem Gambling Cases
The United Kingdom Gambling Commission has slapped Ladbrokes Coral Group with a collective fine of £5.9 million (nearly $7.2 million USD) over a series of corporate failures regarding the safeguarding of customers against addictive-gambling behavior and the money laundering of ill-gotten funds. The fine is composed of a £4.8 million financial penalty, a £1.1 million rebursement to victims of fraud or other crimes perpetrated by the gamblers, and a small assessment to cover the Gambling Commission’s investigative costs.
The combined penalty is one of the largest in UKGC enforcement history, and includes oversight failures regarding seven separate account holders. The oversight failures occurred between November 2014 and October 2017 and took place within both the Ladbrokes and Coral branded operations, following the merger of Ladbrokes and Gala Coral into the Ladbrokes Coral Group. All of the activity took place before the subsequent acquisition of that combined entity by current owner GVC Holdings, though GCV is required to pay the penalties.
According to a public statement of findings, an additional five Ladbrokes and Coral accounts are being investigated for similar oversight failures. GVC has already pledged its cooperation with the UKGC’s ongoing investigative efforts. GVC is charged with retaining a team of solicitors to conduct what amounts to a forensic audit of those accounts’ activities.
The Commission published these as selective examples of the activity and lack of oversight that drew the hefty fine:
- Ladbrokes did not carry out any social responsibility interactions with a customer who lost £98,000 over two-and-a-half years, had 460 attempted deposits into their account declined, and even asked the operator to stop sending promotions.
- Despite one customer spending £1.5m over two-years 10 months, Coral did not ask the customer to evidence their source of funds and could not provide evidence of any social responsibility interactions being carried out. During their time with the operator the customer displayed signs of problem gambling including logging into their account an average of 10 times a day for a month and losing £64,000 in one month alone.
- Ladbrokes could not provide any evidence of carrying out social responsibility interactions with a customer who deposited over £140,000 in the first four months of their account being open.
- Ladbrokes, having identified concerns with a customer, then allowed further significant gambling without taking additional steps to verify the source of funds or consider if the customer could afford to spend and lose that amount of money.
Ladbrokes Coral’s Gala Interactive unit was hit two separate penalties in 2017, including a £2.3m fine late that year involving two other customers who committed fraud against third-party victims, then gambling those proceeds away on the operator’s services.
UKGC Executive Director Richard Watson said, “Decision makers at gambling businesses need to invest in the welfare of their customers and the integrity of money being gambled with. These were systemic failings at a large operator which resulted in consumers being harmed and stolen money flowing though the business and this is unacceptable.”
As another facet of the settlement, GVC will allow a forensic evaluation of the 50 Ladbrokes Coral accounts during the years 2015-17 to see what other oversight failures might have occurred.
The UKGC’s damning of Ladbrokes Coral’s lack of concerns over the source of certain whales’ gambling funds might be best summed up in these two paragraphs of the Commission’s statement:
These failings stemmed from inadequate anti-money laundering (AML) and social responsibility policies and processes, and insufficient staffing to support these systems. This meant the Ladbrokes Coral Group had ineffective controls to identify and interact with customers who may have been suffering gambling harm or money laundering. Further, when it did identify its AML controls were insufficient, the changes it implemented were not adequate to address the problem.
In addition to these general failings we identified an instance where Ladbrokes had identified concerns regarding the source of a customer’s funds, but nevertheless decided to continue their business relationship with the customer and did not conduct any further checks or interactions.