Entain pleads for tougher crackdowns on gambling

Find the difference.

Next: Entain, owner of Ladbrokes and Coral, “acknowledges and regrets that certain legacy systems and processes . . . failed to meet regulatory requirements for social responsibility and protection against money laundering (AML)”.

Now: Entain “only accepts some legacy systems and processes.” . . were not consistent with changing regulatory expectations . . . with regard to aspects of social responsibility and anti-money laundering safeguards”.

2019: The group, then called GVC, was fined £5.9million by the Gambling Commission, but said it had already “transformed its processes for tackling gambling money laundering and safer gambling” through its “industry-leading bettor-changing responsible gambling strategy”.

2022: The company accepts a £17m fine for its failure to enforce AML rules and protect vulnerable customers. And what do you know? The behavior between December 2019 and October 2020 “predates many changes” the company has made, including its “Advanced Responsibility and Care program” which uses “revolutionary AI technology”.

Perhaps it is for the best that the machines are now involved. Because the other people involved in this story – at Entain, the regulator, or both – seem slightly slow to adopt.

As the UK government is expected to finalize its long-awaited gambling reform document, Entain’s latest fine raises questions about the industry’s ability to change and the effectiveness of the current regulatory system.

How much incentive are there really for companies to self-police and carry out proper checks on what commission chairman Marcus Boyle recently described as “breathtaking examples of substantial sums being taken from people who cannot afford to bet such sums”?

Perhaps he meant the customer who deposited £230,845 over 18 months, repeatedly playing overnight, with just one company chat interaction, and whose account was mistakenly reopened in 2018 after a previous decision to close it?

Or the client who deposited £742,000 over 14 months with no questions asked about affordability or income? Or the social housing resident who deposited £186,000 over six months, with no verification of his source of funds?

Or the lack of control over a customer who regularly loaded £500 into betting shop terminals, betting £168,000 over eight months and losing a total of £28,000? Or failing to refer a shop customer who uncharacteristically bet £29,372 and lost £11,345 in a single month for a safer game review?

Entain’s sentence was a negotiated settlement, rather than an imposed fine or formal warning; his license was not reviewed. He said that despite the AML violations, the commission found no evidence of “criminal expenditures” in its operations.

The industry – in 2019 and now – complains that the increase in fines reflects a punitive and unpredictable regulator that does not work constructively with the sector. Similarly, Boyle said in May that the app to date, with operators paying more than £130m over five years, “is clearly not enough of a deterrent”.

Fines can be a cost of doing business for an industry that depends on a small number of its customers betting large sums of money: excluding the National Lottery, the industry makes 90% of its money from 5% of its customers, according to the regulator. . Entain’s latest bill represents around 3% of the group’s underlying profit from last year.

Its recurrences appear to argue for more systematic intervention being considered by the government, such as more formal accessibility controls, as it seeks to limit the reach of the sector and prevent damage following its explosive growth since liberalisation. in 2005. -up regulator, supported by independent research based on real-time data that could be funded by a proposed statutory industry levy.

Threats of tougher action from the regulator, including the “very real possibility” of license revocation, are not seen as very credible by the industry, by those campaigning against gambling harms, or by the market. Entain’s shares fell just 3% when the fine was announced.

The industry’s promises seem equally weak. The industry is promising a “single customer view” of an individual’s behavior, a challenge handed by the regulator to the industry body, the Betting and Gaming Council. Yet Entain couldn’t even manage this within its own group: a client whose account had been blocked at Coral was able to immediately register with Ladbrokes and deposit £30,000 in a single day.

Entain, as part of its bylaws, will appoint a board member to oversee its improvement plans. But it is policymakers in Westminster who must do more to prevent damage to the sector.

helen.thomas@ft.com
@helentbiz

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