The UK Gambling Commission (UKGC) has hit one of Britain’s biggest betting operators with a £582,120 penalty. In a story all too familiar to UK gambling, bet365 has been penalised for anti-money laundering (AML) and social responsibility failures.
Updating the industry this morning, the UKGC confirmed that the two licence-holding entities behind bet365, bingo and casino operator Hillside (UK Gaming) ENC and sports betting operator Hillside (UK Sports) ENC, had been charged £343,035 and £239,085, respectively.
Four AML breaches were identified by the UKGC. Firstly, bet365 was found to have adopted enhanced due diligence and KYC triggers that were judged ineffective at managing the risk of money laundering.
The Stoke-on-Trent-headquartered firm has also been accused of failing to undertake financial sanctions checks on new customers prior to first deposit, failing to conduct independent verification checks and over-relying on annual self-verification by customers.
Self-verified KYC information used by the operator included identity documents. Lastly, the UKGC states that bet365’s procedure document had ‘inadequate detail’ as to which customers would be deemed ‘at risk’ or ‘not at risk’ for risk profiling.
Kay Roberts, Executive Director of Operations at UKGC, said: “The policy and procedural failings may not have been as severe as those at other gambling businesses in recent years but they were failings nonetheless.
“We expect high standards from operators in terms of keeping gambling safe, fair and crime-free, and will always take action to correct any failings. This operator is very aware that a repeat of these failings will result in escalating regulatory action.”
In addition to AML failures, the Commission has also charged bet365 for three breaches of UK licence social responsibility requirements. Firstly, the online bookmaker did not conduct customer interactions tailored to specific journeys.
The group’s early risk detection system was also deemed ineffective in understanding the impact of individual customer reactions and its approach to evaluation was criticised for being unable to effectively determine if customers had read or understood advice on interactions.
The accusations against bet365 are a familiar sight to many stakeholders across UK betting, with a number of operators – both large and small – penalised for similar shortcomings by the UKGC over the past few years.
This has included the headline grabbing charges of £17m and £19.2m levied against Entain and William Hill in 2022 and 2023, respectively, with both penalties breaking records at the time of issuing.
In the context of the UK Gambling Act review – the recommendations of which are currently being consulted on and which the government intends to adopt later this year – British betting operators are facing a much tougher regulatory environment.
This includes greater scrutiny over AML and social responsibility requirements, as seen by today’s enforcement against bet365, but also other implications for the customer payments journey. Financial risk checks, also known as affordability checks, are perhaps the most significant and widely debated example of this.
