Ladbrokes Coral hit with Massive £5.9m Penalty Package by UKGC

By Simon Wright, Last updated Jan 26, 2021

The owners of Ladbrokes Coral, GVC Holdings, are nursing something of a financial headache this morning after they were hit by a massive ‘penalty package’ by the UK’s Gambling Commission.

In financial terms GVC Holdings  as a result have to pay out £5.9m, which forms part of the penalty package levied by the Gambling Commission. The ruling from the UKGC came about after it was found that Ladbrokes Coral had shown past failings in areas concerning anti-money laundering and social responsibility.

This is just the latest in a number of actions the Gambling Commission have taken in this area, with Ladbrokes Coral joining the likes of 888, William Hill and 32Red owner the Kindred Group, all having to pay out, after having penalty packages levied against them by the UKGC.

In this instance, the UKGC have found systemic failures at the Ladbrokes Coral Group,  specifically between the period November 2014 and October 2017, where it was found they had failed to put in place effective safeguards to prevent consumers suffering gambling harm and against money laundering. The Gambling Commission also found that these failings continued even after the Ladbrokes and Coral brands merged.

The action taken by the UKGC has already this morning been taken up by the main stream media, with the failings of Ladbrokes Coral and the subsequent penalty package they have been hit with, being used by some in the media to use for their anti gambling agenda.

However, it is quite hard to put up any defence for Ladbrokes Coral in the areas that the Gambling Commission have identified, which led to the penalty package being put in place.  With four key issues being identified after a thorough investigations. These were specifically:

• 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.

Source of Wealth

Many players based in the UK have been bemoaning online casino operators requesting source of wealth information, which can and does drive players away from the casino in question requesting such information. You are not required to provide this information at a land based casino within the UK, yet online many operators are requesting such personal and private information.

What the above with Ladbrokes Coral highlights, is that operators should at the very least request this information when they have players depositing vast amounts of money and numerous declined deposits.

Yet, based on just the threads that have cropped up on the forums here on  Casinomeister, it appears that every day ‘run of the mill’ players are being targeted.  Whilst the players identified as part of this investigation by the UKGC into Ladbrokes Coral have fallen through the cracks as it were. Hence the penalty package being revealed this morning and the fact that opponents of gambling in general, are picking up the ball and running with it.

Speaking about this specific investigation, Richard Watson, the Gambling Commission Executive Director, stated: “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.”

Penalty Package Summary

“GVC will pay £4.8m in lieu of a financial penalty and will divest £1.1m 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.”

Furthermore, GVC Holdings will have to perform the following:

• Engage an external UK firm of solicitors to review five further customer accounts identified by the Commission and will divest itself of any GGY as directed.
• GVC will employ an external UK firm of solicitors to undertake the following within a reasonable time and report findings to the Commission:
  • Dip-sample a review Ladbrokes Coral conducted July – October 2017 applying its new processes to all active customer accounts to evaluate whether the review was robust and fit for purpose.
  • Dip-sample a review to be undertaken by GVC in 2019 of a group of existing customers, to evaluate the robustness of this process.
  • Manage and oversee a review of the current processes at the completion of transition, and provide independent analysis of the new and updated procedures to ensure they meet or exceed its regulatory obligations.
  • Review the top 50 customers by GGY for the years 2015, 2016 and 2017 to consider whether any of the failings identified in this report are evidenced and if so, to divest the GGY accordingly.
• Agreement to the publication of a statement of the facts in relation to this case.
• Payment of £24,700 towards the Commission’s costs of investigating the case.

For further details, please visit the publication on the Gambling Commission site here.

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