£5.9m penalty package for Ladbrokes Coral Group over ‘systemic failings’

Ladbrokes Coral Group is being hit with a £5.9 million penalty package for “systemic failings” in its anti-money laundering and social responsibility safeguards.

The Gambling Commission said consumers had been harmed and stolen money had “flowed through the business” due to “unacceptable” shortcomings.

An investigation by the commission between November 2014 and October 2017 found Ladbrokes and Coral failed to put in place effective safeguards to prevent money laundering and consumers suffering gambling harm, with this failing continuing after their merger as the Ladbrokes Coral Group.

Among the failings highlighted by the commission were:

– Ladbrokes not carrying 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.

– Corals failing to check the source of funds used by a customer who spent £1.5 million over two years and 10 months. The customer had displayed signs of problem gambling including logging into their account an average of 10 times a day and losing £64,000 in one month alone.

– 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.

Commission 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 through the business and this is unacceptable.”

The commission said that as part of the settlement the Ladbrokes Coral Group’s new owners GVC will pay £4.8 million in lieu of a financial penalty and will divest £1.1 million gained from customers as a result of its failings.

GVC will also review the top 50 customers for the years 2015-2017 to consider whether any further failings can be identified “and if so they will divest themselves of profit accordingly”.

The commission said GVC had committed to making a number of improvements to the business including overhauling its responsible gaming and customer interaction processes, retraining staff and hiring new staff.

Commenting on the announcement, GVC CEO Kenneth Alexander said: “Soon after the acquisition of Ladbrokes Coral following meetings and ongoing enquiries by the Gambling Commission, it became clear to GVC that there had been historic compliance failures within certain areas of the operations.

“Working closely with the Gambling Commission and an independent firm of solicitors, GVC facilitated a thorough, prompt and far-reaching investigation, which has led to today’s settlement.

“These historical failings were unacceptable and since the acquisition, I have overseen a systematic review of the enlarged Group’s player protection procedures and the individuals responsible for these problems have exited the business.

“I am confident that, we now have in place a robust and industry leading approach to player protection.

“More broadly, GVC is determined to take the lead in the critical area of responsible gambling, and is taking decisive, tangible action across a range of initiatives.

“This includes our recent voluntary commitment to increase funding for research, education and treatment projects ten-fold, as well as our decision to end all sponsorship deals that promote our brands on UK football shirts or on pitch-side advertising hoardings.

“However, there is more to be done and social responsibility and we will continue to work with other gambling companies and the Gambling Commission to raise operating standards.”

The £5.9 million penalty for Ladbrokes Coral Group is one of the biggest imposed by the gambling watchdog.

888, one of Britain’s biggest online gambling firms, had to pay a record £7.8 million in August 2017 as a result of serious failings in its handling of vulnerable customers.

Online gambling business Daub Alderney was hit with a £7.1 million penalty in November 2018 for failing to follow rules aimed at preventing money laundering and protecting vulnerable consumers.

William Hill had to pay at least £6.2 million for systemic senior management failure to protect consumers and prevent money laundering in a penalty package announced in February 2018.