Petfre (Gibraltar) Limited, the online gambling operator trading as Betfred, has agreed a £322,000 (€357,588/$393,887) settlement with the GB Gambling Commission after failing to carry out appropriate checks on a customer who gambled £210,000 of stolen money through its site.
The individual in question lost £140,000 of that sum, having deposited the £210,000 over twelve days. The Commission said the fact they were able to deposit and lose such significant amounts in such a short period of time clearly indicated failings in the operator's anti-money laundering (AML) policies and procedures.
The regulator's investigation was launched after it recievd a tip-off regarding the customer, who had been convicted of a £2m fraud, spending stolen money through several gambling sites, including Betfred.
The customer in question opened a number of gambling accounts in a short period of time, making large deposits and losing significant sums. In the case of Betfred, the customer deposited their £210,000, losing all but £70,000, over 12 days in November 2017.
This prompted the Commission to raise concerns over the operator's management of this customer, ultimately ruling that it failed to act in accordance with the Licence Conditions and Codes of Practice (LCCP). It was also found to have failed to adhere to the duties and responsibilities set out in the Proceeds of Crime Act 2002.
Betfred was found to be in breach of LCCP condition 220.127.116.11, which directs licensees to ensure their policies, procedures and controls are implemented effectively, kept under review and revised appropriately to ensure they remain effective.
During its investigation, the Commission found Betfred’s policies led it to request Source Of Funds (SOF) on two occasions in November 2017, but the customer failed to provide this. Failure to obtain SOF allowed the customer to deposit £210,000, and lose £140,000, of stolen money during the period in question. As a result, the regulator ruled, the operator had failed to act in accordance with Ordinary Code provision 2.1.2.
Betfred accepted there were shortcomings in its AML procedures, and agreed that it failed to take Commission advice on its duties and responsibilities under the Proceeds of Crime Act 2002.
The Commission ultimately believed that the breach stemmed from a particular shortcoming in its control measures, rather than the lack of a coherent AML policy, which had since been addressed. It also acknowledged that the breach had been an isolated incident, and that the operator had been transparent and open in its dealings with the regulator, and willing to divest itself of any gross gambling yield generated through its failings.
Betfred has therefore agreed a settlement of £322,000. This sees it divesting the £140,000 in gross gambling yield, which is to be returned to the invidiual from whom the money was originally stolen. It will also pay £182,000 in lieu of a financial penalty, to be used to fund the Commission's National Strategy to Reduce Gambling Harms. Finally, the operator will pay £15,164.42 towards the Commission’s investigative costs.
Alongside the details of the settlement, the Commission has published guidance for remote and non-remote gambling operators to ensure they are complying with AML measures.
It akss operators to check whether they carry out appropriate assessments of the risks of money laundering and terrorist financing for their business, and if they are properly monitoring of customers and carrying out enhanced customer due diligence.
The Commission also urged licensees to consider if they have the policies and procedures in place that makes specific provision for using all relevant sources of information, and if their current AML policies and procedures are effective.