It was an extraordinary accusation, dropped casually into the news cycle on a quiet Sunday morning. But The Observer, as republished in The Guardian, has made the incredible claim that the UK Gambling Commission has struck a series of ‘secret deals’ with betting firms and operators in a bid to keep regulatory action out of the press.
In return for ‘surrendered revenues’, the regulator has apparently agreed to keep the failings of certain operators on the down low and instead place them in special measures, which means that the breaches do not have to be reported formally by the Gambling Commission.
Plan of Action
It’s remarkable how little has been made of The Observer’s exclusive, and how quickly the story has fallen out of the news cycle. But if their findings are correct, then they allege that the Gambling Commission has allowed some operators to circumnavigate fines and even licence suspension by agreeing to be put on an action plan.
As long as the betting firm agrees to implement the measures detailed in the plan, while ‘divesting’ any of the profits they have made as a result of their failings, the operator’s rule breaches will not be released into the public domain. If that is true, it’s an extraordinary breach of the regulator’s responsibility to providing full transparency in their dealings with the licensees that they allow to operate on UK soil.
An Ongoing Legal Battle
The accusation has come to a head amidst the backdrop of a legal battle brought by Annie Ashton, whose husband Luke took his own life after battling gambling addiction. It has been alleged that Betfair, with whom he wagered, allowed Mr Ashton to run up considerable losses without any interventions or action being taken.
It has since emerged that Betfair were ‘allowed’ to divest more than £600,000 in profits, while agreeing to a special measures improvement plan, in return for avoiding regulatory action at the hands of the Commission. In response, the regulator commented: “We vigorously disagree with any claims we have failed to adequately regulate operators or protect people from harm.” They also refused to take formal disciplinary action against Betfair.
Mrs Ashton, meanwhile, believes that any operators that are placed into special measures should be made known publicly. She said:
This information should be public knowledge and it should be scrutinised. In Luke’s case, we now know Betfair was in special measures and the regulator should have been looking at them with even more scrutiny. Someone died under their watch.
The Gambling Commission hasn’t, at the time of writing, made any formal reply to The Observer’s accusations, while claiming that it was unable to provide exact figures on the number of operators that had quietly been placed into special measures. They have also denied a freedom of information request that would have identified the firms by law.
The Regulator’s Strategic Objectives
The regulator has devised a list of five strategic objectives that inform its work, with number one being ‘to protect children and the vulnerable from being harmed by gambling.’ But if they’re not revealing publicly which operators are not reaching the proper standards when it comes to social responsibility, can they really ever achieve that number one goal?
Meanwhile, the Gambling Commission has turned its crosshairs on its licensed operators by demanding that they up their game with regards to anti-money laundering practices. The regulator’s John Pierce, speaking at a training seminar, said that firms should be looking more closely at the personal data of their high spending customers, with particular reference to their salary or personal wealth.
Pierce also wants to see bookmakers and casinos implementing their AML measures more quickly, which would minimise the amount of time that criminals have to ‘wash’ their money. Too many firms are using financial triggers as a last line of defence, rather than actively determining the risk-profile of the individual and any ‘disproportionate spending’, he added.
The regulator has even identified cases in which customers are allowed to self-declare their salaries, income and savings, with this information not adequately scrutinised by operators. Pierce said:
We have found cases where customer risk profiling and ongoing monitoring does not reflect the risks that the business has identified in their risk assessment. We encourage operators to review their monitoring procedures and customer profiles, to ensure that a customer’s risk profile aligns with a full range of risks, such as geographic, customer transaction and product risk.