BetFred in Gib hit £800k penalty by UKGC - AML and resp gamb

[Richas]

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Betfred to pay over £800,000 following licence review

Posted on 14 June 2016

Betfred will pay more than £800,000 in compensation and in contribution towards socially responsible causes as part of a regulatory settlement following a licence review.
This payment follows failures by the operator in its anti-money laundering and social responsibility policies.
The Gambling Commission’s investigation follows a court case that resulted in a Betfred customer being jailed for three years and four months after admitting to stealing from his employer. A significant proportion of the stolen money was spent with Betfred.
Under the terms of the settlement, £443,000 will be paid to the victims of the criminal activities. A further £344,500 will be paid, in lieu of a financial penalty, to socially responsible causes, agreed with the Commission. Betfred will also meet the Commission’s investigation costs.
In addition, under the settlement, Betfred must conduct an independent third party review and audit of its anti-money laundering and social responsibility policies and procedures. This will include customer due diligence, enhanced due diligence and on-going monitoring practices.
Richard Watson, Programme Director at the Commission, said: “We identified a number of weaknesses in the anti-money laundering and social responsibility controls used by Betfred. The penalty package of over £800,000 reflects these failures.
“The Commission has now concluded a wide range of cases over the last 10 months leading to around £3.75million in penalty packages. The outcomes and findings in these cases provide a clear signal to operators of the need to learn the lessons from these for social responsibility and money laundering controls, or risk facing tougher sanctions.”

my bold

 

[Casinomeister]

“The Commission has now concluded a wide range of cases over the last 10 months leading to around £3.75million in penalty packages.

A wide range of cases? Which ones?

 

[vinylweatherman]

A wide range of cases? Which ones?

Good point. There is a PDF of all penalties, warnings, and revocations from as far back as 2014, and they don't add up to anywhere near £3.75 million in penalties, even adding on this recent £800,000 penalty.

It looks like the UKGC are either not publishing all of it's penalties, or the figure is being inflated somehow.

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[jetset]

UKGC details on the Betfred issue:

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[Captain Chaos]

Well it's good to see that the victim in question is going to at least see part of the money returned to him. But that is an incredible lack of due diligence there. It really does go to show just how important KYC is. How such a well known high street name could operate their online operation with such casualness as to where a high spending customers funds are coming from is mind boggling! I would have thought that any casino operation would consider such checks to be par for the course?

Sadly I feel that there appears to be from my reading of this case that there was a culture of 'does it matter? We're making loads!' going on. They appear to have been roundly caught out here!

I'm confused though. The PDF appears to report on the case with West Yorkshire Police. What is the rest of the fines and cases related to?

 

[Richas]

Well it's good to see that the victim in question is going to at least see part of the money returned to him. But that is an incredible lack of due diligence there. It really does go to show just how important KYC is. How such a well known high street name could operate their online operation with such casualness as to where a high spending customers funds are coming from is mind boggling! I would have thought that any casino operation would consider such checks to be par for the course?

Sadly I feel that there appears to be from my reading of this case that there was a culture of 'does it matter? We're making loads!' going on. They appear to have been roundly caught out here!

I'm confused though. The PDF appears to report on the case with West Yorkshire Police. What is the rest of the fines and cases related to?

This article lists some of them, the full total is right, each case in the past 10 months has its own press release and PDF on the UKGC site

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[redsfan]

Well it's good to see that the victim in question is going to at least see part of the money returned to him. But that is an incredible lack of due diligence there. It really does go to show just how important KYC is. How such a well known high street name could operate their online operation with such casualness as to where a high spending customers funds are coming from is mind boggling! I would have thought that any casino operation would consider such checks to be par for the course?

Sadly I feel that there appears to be from my reading of this case that there was a culture of 'does it matter? We're making loads!' going on. They appear to have been roundly caught out here!

I'm confused though. The PDF appears to report on the case with West Yorkshire Police. What is the rest of the fines and cases related to?

Why would KYC help in this matter? He simply put his ill gotten gains in his own account then put them into Betfred. It says in the article that Betfred never questioned where the money came from and some questionable items were on his bank statement.

 

[vinylweatherman]

Why would KYC help in this matter? He simply put his ill gotten gains in his own account then put them into Betfred. It says in the article that Betfred never questioned where the money came from and some questionable items were on his bank statement.

It would appear that the UKGC think casinos should delve much deeper into our private affairs than they do now. This is rather worrying from a players' point of view because it is suggested that BetFred got into trouble for not going through this players' bank statements, which as far as players are concerned is "none of their damn business". When a bank statement is sent as part of the KYC process, it is to verify our address, not so that the casino can trawl through our private financial affairs. Besides, what if he had sent something else for KYC such as a utility bill, or had several bank accounts, with one dedicated to gambling.

Perhaps the underlying problem is that BetFred made unjustified assumptions based on the amount he was depositing (that he was a company director etc), and these assumptions then clouded their judgement such that they failed to properly monitor the player.

The outcome of this could be that UK players will receive some pretty intrusive requests from now on from casinos, such as wanting to see the last x months of our bank statements, and EVERYTHING on them, not just the deposits to casinos. What next, a reference from our employer!

 

[Richas]

Why would KYC help in this matter? He simply put his ill gotten gains in his own account then put them into Betfred. It says in the article that Betfred never questioned where the money came from and some questionable items were on his bank statement.

He was losing tens of thousands. The main document shows how badly they failed. A simple check on his postcode showed no big expensive home, a simple google showed he was not a director. Their request for information of source of funds showed large, disguised and very irregular payments.

His betting pattern was awful, escalating stakes, emptying his online account then coming back with more. He showed clear chasing behaviour and no evidence of where the funds came from.

They did the usual trick of offering big deposit bonuses when he had emptied his account. They saw and tracked the harmful behaviour but then encouraged it.

 

[Richas]

It would appear that the UKGC think casinos should delve much deeper into our private affairs than they do now. This is rather worrying from a players' point of view because it is suggested that BetFred got into trouble for not going through this players' bank statements, which as far as players are concerned is "none of their damn business". When a bank statement is sent as part of the KYC process, it is to verify our address, not so that the casino can trawl through our private financial affairs. Besides, what if he had sent something else for KYC such as a utility bill, or had several bank accounts, with one dedicated to gambling.

Perhaps the underlying problem is that BetFred made unjustified assumptions based on the amount he was depositing (that he was a company director etc), and these assumptions then clouded their judgement such that they failed to properly monitor the player.

The outcome of this could be that UK players will receive some pretty intrusive requests from now on from casinos, such as wanting to see the last x months of our bank statements, and EVERYTHING on them, not just the deposits to casinos. What next, a reference from our employer!

There should be no real impact on normal players. Those showing patterns indicative of problem gambling maybe, those losing huge sums, definitely.

When I had a spread betting account many years ago they needed to see X thousand in accessible assets. For a credit based sports spreading account I thought that was fine. If I were losing tens of thousands online I want the firm to check I can afford it, if that means checking my address, asking for a statement showing I actually have income/assets then fine. This is a protection and it will not affect normal recreational gamblers much at all. Maybe some that hate withdrawals will chuck up some extra KYC checks but it is likely they would do that anyway without the UKG and withdrawals is not what the UKGC is asking them to check - it is deposits out of all relationship to the customer's means.

 

[geordiecolin]

It would appear that the UKGC think casinos should delve much deeper into our private affairs than they do now. This is rather worrying from a players' point of view because it is suggested that BetFred got into trouble for not going through this players' bank statements, which as far as players are concerned is "none of their damn business". When a bank statement is sent as part of the KYC process, it is to verify our address, not so that the casino can trawl through our private financial affairs. Besides, what if he had sent something else for KYC such as a utility bill, or had several bank accounts, with one dedicated to gambling.

Perhaps the underlying problem is that BetFred made unjustified assumptions based on the amount he was depositing (that he was a company director etc), and these assumptions then clouded their judgement such that they failed to properly monitor the player.

The outcome of this could be that UK players will receive some pretty intrusive requests from now on from casinos, such as wanting to see the last x months of our bank statements, and EVERYTHING on them, not just the deposits to casinos. What next, a reference from our employer!

Betfred have just requested a urine sample from me as well as a hair sample,bloody sample,stool sample and semen.

I simply took my undercrackers off and sent them.

 

[vinylweatherman]

There should be no real impact on normal players. Those showing patterns indicative of problem gambling maybe, those losing huge sums, definitely.

When I had a spread betting account many years ago they needed to see X thousand in accessible assets. For a credit based sports spreading account I thought that was fine. If I were losing tens of thousands online I want the firm to check I can afford it, if that means checking my address, asking for a statement showing I actually have income/assets then fine. This is a protection and it will not affect normal recreational gamblers much at all. Maybe some that hate withdrawals will chuck up some extra KYC checks but it is likely they would do that anyway without the UKG and withdrawals is not what the UKGC is asking them to check - it is deposits out of all relationship to the customer's means.

There is an expectation of privacy of affairs, and some companies seem to have gone even further, asking to see the affairs of other family members, not just the player. Not only is this a step too far, it's illegal because the player has no legal right to send the private data of other family members to a casino, in fact, this data should not even be available to the player to send even if he wanted to. The casino would have to ask the other family members direct for the data, but this too risks breaking the DPA because the player may not have told his family about his gambling, and the casino would have to reveal personal information about their customer to other family members in order to make the request. The DPA doesn't even allow an energy company to discuss the household bill with the spouse of the bill payer, so it is hardly likely to allow a casino to demand a player send them bank statements to show how money has moved in the family before it became the property of the player.

Seeing available assets for a credit account would be acceptable as part of ensuring that credit is not extended to people who don't have the means to repay it. There is a different expectation of privacy when someone is not applying for credit, and it's impossible to make a judgement about a players' means purely based on what they deposit. For some, a deposit of £100 each week could be beyond their means, but for others £500 a day would be "spare change".

It would be better to have a fixed figure at which casinos have to ask to see evidence of means, so that it isn't down to the discretion of casino management. We already have this for lifetime withdrawals, the €2300 trigger for full KYC. Maybe the UKGC should set a figure for either lifetime deposits or a certain rate of deposits that will trigger a means test. By applying this to all under a regulation, it avoids the possibility of casinos misusing the rules against players in order to deprive them of legitimate winnings, and it would also avoid the possibility of a casino dropping the ball when it comes to assessing someone as VIP with considerable means through fear of insulting them and driving them away by insisting upon seeing proof of means where it's purely a matter of discretion to make such a request.

 

[Richas]

It would be better to have a fixed figure at which casinos have to ask to see evidence of means, so that it isn't down to the discretion of casino management. We already have this for lifetime withdrawals, the €2300 trigger for full KYC. Maybe the UKGC should set a figure for either lifetime deposits or a certain rate of deposits that will trigger a means test. By applying this to all under a regulation, it avoids the possibility of casinos misusing the rules against players in order to deprive them of legitimate winnings, and it would also avoid the possibility of a casino dropping the ball when it comes to assessing someone as VIP with considerable means through fear of insulting them and driving them away by insisting upon seeing proof of means where it's purely a matter of discretion to make such a request.

I have some sympathy for this in that it gives clarity but what is the right level? Someone displaying a pattern of chasing/problematic behaviour and doing that for tens of pounds on a fortnightly basis? Is that a responsible gambling check required? Well maybe, if that's their benefit money and they are making themselves destitute, then that is problem gambling.

Meanwhile someone else losing ten times as much, maybe even with a monthly pattern might not deserve a responsible gambling check if it is a small proportion of their salary.

For money laundering concerns there is an agreed level for withdrawals, checking who the money is going to and maybe an annual level or lifetime level for deposits could work well for clarity for proceeds of crime but again, what is the right level. Is it someone stealing £50 a week from their work to gamble? Is it when they have lost £10k? £50k? Again for me it should depend in part on what they know about the person already, so if they google and see he is a Company Director, check his postcode and it is an expensive area why have a low checking figure? Whereas if the only google is a court case say assault, describing them as unemployed and the postcode is in a rough area is them losing even £1k too high figure to be unconcerned about proceeds of crime.

Any of these eople, rich or poor should be allowed to bet as they like but the firm needs to try to help those with a problem and raise concerns about proceeds of crime.

 

[vinylweatherman]

I have some sympathy for this in that it gives clarity but what is the right level? Someone displaying a pattern of chasing/problematic behaviour and doing that for tens of pounds on a fortnightly basis? Is that a responsible gambling check required? Well maybe, if that's their benefit money and they are making themselves destitute, then that is problem gambling.

Meanwhile someone else losing ten times as much, maybe even with a monthly pattern might not deserve a responsible gambling check if it is a small proportion of their salary.

For money laundering concerns there is an agreed level for withdrawals, checking who the money is going to and maybe an annual level or lifetime level for deposits could work well for clarity for proceeds of crime but again, what is the right level. Is it someone stealing £50 a week from their work to gamble? Is it when they have lost £10k? £50k? Again for me it should depend in part on what they know about the person already, so if they google and see he is a Company Director, check his postcode and it is an expensive area why have a low checking figure? Whereas if the only google is a court case say assault, describing them as unemployed and the postcode is in a rough area is them losing even £1k too high figure to be unconcerned about proceeds of crime.

Any of these eople, rich or poor should be allowed to bet as they like but the firm needs to try to help those with a problem and raise concerns about proceeds of crime.

It's the invasive checks that are the issue. Most players understand KYC and that a bank statement is simply an option for proving their address. However, when things get more intrusive, such as the casino insisting not just on the bank statement as proof of address, but demanding to see all of it, including the transaction pages that have nothing to do with verifying an address or the source of deposits to the casino, players feel that this is merely the tactic of a rogue casino looking for an excuse not to pay. If there was a specific regulation set out that the casino could refer the player to, it would protect the casino from being branded rogue, and also show the player that it was the UKGC that was behind the highly intrusive demands, not the whim of casino management. Without an overriding regulation, such requests could be at odds with the DPA, as it specifies that businesses cannot insist on whatever personal data they fancy, they have to limit their demands to what is "necessary to carry out the contract" they have with the consumer.

The fact that casinos can even get this level of information merely from Googling the players' name would worry many, and of course where it comes to laundering money, those involved would also be Googling their own names to see what the casinos or banks own security teams might be able to unearth, and then managing the information such that it is less likely to catch them out, even if this means stealing the identity of someone who would have the means to push large sums through a casino without causing concerns for security staff.

It might even be better to have a system that does not involve the player having to hand over bank statements, one that casinos can operate in the background with the cooperation of the banks and credit reference agencies, and sanctioned by the government. This could be used to set a figure for deposits and losses above which an individual player would be flagged as a possible problem gambler, at which point they will be monitored more closely, and there should also be a reduction in marketing to them that is designed to induce them to deposit more.

 

[Richas]

It might even be better to have a system that does not involve the player having to hand over bank statements, one that casinos can operate in the background with the cooperation of the banks and credit reference agencies, and sanctioned by the government. This could be used to set a figure for deposits and losses above which an individual player would be flagged as a possible problem gambler, at which point they will be monitored more closely, and there should also be a reduction in marketing to them that is designed to induce them to deposit more.

Ughh, you think that is better? Having gambling firm credit checks on your credit record? Having banks give up info without you providing it personally?

It is a complex area, but IMHO it should be you providing data, if you want to, not firms geting it without your knowledge (and leaving fingerprints on your credit record).

 

[vinylweatherman]

Ughh, you think that is better? Having gambling firm credit checks on your credit record? Having banks give up info without you providing it personally?

It is a complex area, but IMHO it should be you providing data, if you want to, not firms geting it without your knowledge (and leaving fingerprints on your credit record).

They do credit checks already, both for ID and AML, but they are supposed to use a "soft search" that only you can see, but will not affect credit scores.

Given what they are expected to do in terms of RG, they are already supposed to look at a players' means, such as whether he lives in the kind of affluent area that could justify the level of deposits made. RG is even more invasive than AML.

If it's compulsory for you to provide the data anyway, you can't win, you provide, or you don't get paid. Also, if players are in control of what the casino sees, then it defeats the object of having the data in the first place. I could easily set up my affairs such that the casino only sees me using the bank account I want them to see, so that if they ask for a full set of statements, I can ensure they see what they want to see in order for them to accept my custom and pay my winnings. If there is something I didn't want them to see, I would use a different bank account that would never be used at any casino, and the only way the casino could even know I had this other account would be via a credit check. I could, if I wanted to, make it appear that I had a regular income of £100,000 per month, but it would really be the same money being pushed around accounts several times. This would be obvious from a view of all my bank statements, but if I got to choose which one they got to see, I would ensure that one was engineered in such a way that the movement of the money just looked like a large regular income being squandered on high living as soon as it came in.

This fine has arisen because it was felt that BetFred were not invasive enough when they had a high depositing VIP client on their hands. This will probably lead to casinos being more invasive in future, and requests to see the last 3 months of bank statements may become as common as requests for photos of you holding your ID document.