The Gambling Commission has found ‘systemic failings’ at the Ladbrokes Coral Group, leading to the imposition of a penalty package consisting of a £5.9m payment and a series of improvement measures that must be implemented by new owner GVC.
The regulator has also revealed that more sanctions may be coming down the line as further investigations into the actions of personal management licence holders continue.
An investigation by the Gambling Commission found that between November 2014 and October 2017 Ladbrokes and Coral failed to put in place effective safeguards to prevent consumers suffering gambling harm and against money laundering, with this failing continuing after their merger as the Ladbrokes Coral Group.
As a result the following occurred:
- 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.
Richard Watson, Commission Executive Director, said: “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.”
As part of this settlement the Ladbrokes Coral Group’s new owners 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.
GVC has committed to making a number of improvements to the business. This includes:
- Overhauling its responsible gaming and customer interaction processes including increases in resources, staff retraining and hiring a dedicated player protection expert outbound call team.
- Implementing its “Changing for the Bettor” strategy comprising of research and educational projects, funding treatment for problem gambling, creating cultural change within the business and promoting responsible attitudes within the industry.
- Engaging a UK firm of solicitors to review any new high or higher-risk customers as may be identified by the Commission or by GVC. Any recommendations arising out of these reviews will be fed back into improvements that could be made to current processes and dealing with divestment.
- The firm will undertake a review and dip-sample of an internal review completed by Ladbrokes Coral from July – October 2017 applying its new processes to all active customer accounts to evaluate whether it was robust and fit for purpose.
- The firm will dip-sample an internal review to be undertaken by GVC in 2019 of a group of customers, to evaluate the robustness of this process.
- The firm will manage and oversee a review of the current Ladbrokes Coral process and provide an independent analysis of the Licensees’ procedures to ensure they meet or exceed its regulatory obligations.
- The firm will review the top 50 customers by gross gambling yield 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.
Commenting on the penalty package Kenneth Alexander, GVC CEO, said: “Soon after the acquisition of Ladbrokes Coral following meetings and ongoing enquiries by the Gambling Commission, it became clear to GVC that there had been historic compliance failures within certain areas of the operations.
“Working closely with the Gambling Commission and an independent firm of solicitors, GVC facilitated a thorough, prompt and far-reaching investigation, which has led to today’s settlement.
“These historical failings were unacceptable and since the acquisition, I have overseen a systematic review of the enlarged Group’s player protection procedures and the individuals responsible for these problems have exited the business. I am confident that, we now have in place a robust and industry leading approach to player protection.”