Betfred Forced to Pay £322k for Anti-money Laundering Failures
Betfred Customer deposited £210,000 in Stolen funds with the operator, and have been subsequently fined £322k for anti-money laundering failings.
Betfred Gibraltar has been ordered to pay £322k after the UK Gambling Commission found the bookmaker had failed to carry out adequate anti-money laundering checks. An investigation by the Commission discovered that a customer was able to deposit stolen funds which resulted in losses of £140,000.
The customer, who was convicted of a £2m fraud, was able to deposit £210,000 using stolen money and rack up the losses over 12 days in November 2017. The commission stated that the customer’s ability to lose such a large amount of money over a short period ‘clearly indicated failings in the effectiveness of Petfre’s anti-money laundering policies and procedures.’
Betfred’s Gibraltar trading subsidiary Petfre has been ordered to replay the gross gambling yield on the £140,000 that the bookmaker had received due to the illegal activity and will refund that amount to the person who was the victim of the fraud.
As well as returning the funds stolen, Petfre will also make a payment in lieu of a financial penalty of £182,000, which the UKGC has confirmed will be directed towards the delivery of the National Strategy to Reduce Gambling Harms. The operator must also publish a statement of facts regarding this judgement as well as paying £15,168.42 towards the Gambling Commissions costs in investigating this case.
Betfred, whose headquarters are in Warrington, have accepted the Gambling Commissions findings and have said they have made improvements to their anti-money laundering procedures and are confident these changes will ensure that the same failings cannot be made again.
David Clifton, a director at Clifton Davies Consultants, was critical of Betfred’s handling of the case and stated that the warning signs were ignored when they received no reply from the customer. He said;
Betfred seem to have heard those bells ringing because they twice requested the source of funds information, but then seemingly did nothing when the customer failed to provide it. –David Clifton, Clifton Davies Consultants
Clifton added that this case highlighted the need for effective customer interactions and said this subject is likely to become more important for the operators as the Gambling Commission are updating the Licence conditions and codes of practice later this month and are likely to increase regulation.
The UK Gambling Commission has been aggressively punishing operators who they find have failed to put in place sufficient safeguards to prevent money laundering and keep consumers safe from gambling-related harm. Following license reviews, casino operator Daub Alderney was fined £7.1m, Casumo £5.85m and Vidoslots were hit with a £1m fine for breaching conditions of its licence concerning anti-money laundering measures.
The Commissions CEO, Neil McArthur, urged betting companies to “sit up and take notice” of these fines and stated it wasn’t enough for policies and procedures to be in place. He added that the Commission would “hold individuals to account” where they are responsible for an operator’s failings.