Betfred to pay £3.25m regulatory settlement over AML failures 


The UK Gambling Commission (UKGC) has announced Betfred will pay a £3.25m regulatory settlement following a series of AML and social responsibility failings.

In addition to discovering shortcomings in the group’s AML strategy, procedures and controls, deficiencies were also uncovered regarding safer gambling policies, procedures, controls and practices, including weaknesses in implementation.

In terms of the paid amount, which will be used for socially responsible purposes and includes a divestment of £1.05m, Betfred has agreed to the publication of related facts and will pay Commission costs. 

Aggravating factors identified include the seriousness of the breaches, impact on licensing objectives and the fact that senior management “should have been aware of governance issues that lead to the breaches, given their significance”.

Steps taken to remedy breaches, such as meeting the UKGC’s timetables of providing material and responses, as well as early and voluntary acceptance of findings and requests to enter into the regulatory settlement process were stipulated as mitigating circumstances.

Kay Roberts, Executive Director of Operations at the Commission, stated: “In recent years there’s been a public focus on online gambling but this case illustrates how important it is for us to continue our drive to raise standards across the whole industry.  “Gambling is a legitimate leisure activity enjoyed safely by millions but it is vital that every single operator – either online or offline – has in place effective safeguards to prevent harm or crime.”

AML failings identified include poor record keeping and financial alerts being set too high, along with failing to consistently obtain know your customer (KYC) and source of funds information.

Customers were found to have staked significant amounts without necessary KYC friction being conducted. Examples were provided of three individuals that lost £61,000 over four months, £72,000 within nine months and another that staked £429,222 and lost £120,353 across 11 months.

In addition, the UKGC noted that Betfred was “placing an undue reliance on open-source information and should have taken further steps to corroborate customers’ SoF information”.

Social responsibility shortcomings include having insufficient controls in place to protect new customers and to monitor high velocity spend and duration of play.

In addition, the Commission also found that Betfred was “making assumptions that customers were not at risk of harm because they were winning customers”.

The company, the UKGC noted, did not carry out interactions on one customer that staked £517,499 between March 21, 2022, and May 18, 2022.

This was due to it being “of the view that this customer was a professional poker player, displayed no signs to encourage staff interaction, and was in a winning position of £8,585 in the period”.

The UKGC added: “It was established that the customer was able to stake close to the entirety of his net worth (based upon open-source checks carried out by the licensee) within a two month period and should have been subject to SG considerations”.

Furthermore, the operator was found to have a lack of evidence of evaluation of the effectiveness of individual customer interactions, as well as poor record keeping that could limit the effectiveness of future interactions.