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William Hill fined £6.2m over protection failures 20/02/18
• Firm handed big fine over failure to spot problem gambling and prevent money laundering

Betting group William Hill has been fined £6.2m by the gambling industry regulator for failing to protect consumers and prevent money laundering.

In a statement, the UKGC said it had identified “systemic senior management failure” across anti-money laundering and social responsibility regulations between November 2014 and August 2016.

An investigation from the national regulator found that senior management “failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money laundering and social responsibility processes were effective”.

It is the commission’s second-largest penalty on record, after it fined the betting firm 888 £7.8m last year for failing to protect vulnerable customers. The regulator said that as a result of failings by senior management and staff at William Hill’s online operations, 10 customers were able to deposit money linked to criminal offences, which resulted in financial gains for the group of around £1.2m.

Tim Miller, executive director of the Gambling Commission, said there were clear warning signs of problem gambling in the spending patterns of some customers that William Hill should have picked up on. The regulator ruled that William Hill “did not adequately seek information about the source of their funds or establish whether they were problem gamblers”.

“In many respects, this wasn’t properly resourced or staffed, so a lot of the checks weren’t happening. People were potentially able to gamble money that was the proceeds of crime; in one case, money stolen from a local council,” Miller told BBC Radio 4’s Today programme.

“There were clear warning signs, the escalating amount of money that was being spent should have set off alarm bells.”

William Hill will pay £5m for breaching regulations and a further £1.2m for the money earned from the transactions with the 10 customers. The commission said if further failures relating to this case emerge, the firm will forfeit any money made from these transactions.

Neil McArthur, executive director of the regulator, said the commission was prepared to use the full range of its powers to make gambling fairer and safer.

“This was a systemic failing at William Hill which went on for nearly two years and today’s penalty package – which could exceed £6.2m – reflects the seriousness of the breaches.

“Gambling businesses have a responsibility to ensure that they keep crime out of gambling and tackle problem gambling – and as part of that they must be constantly curious about where the money they are taking is coming from.”

The commission said that William Hill failed to adequately seek information about the source of their funds or establish whether they were problem gamblers.

As part of its investigation, the commission found that one customer was allowed to deposit £541,000 over 14 months, after William Hill staff assumed his income could be £365,000 a year based on a verbal conversation and without further questioning. The customer was in fact earning around £30,000 a year and was funding his gambling habit by stealing from his employer.

The betting industry is currently awaiting the details of a government clampdown on fixed-odds betting terminals (FOBTs), which are machines that allow customers to stake up to £100 every 20 seconds on digital casino games such as roulette. It is understood the government is considering tough curbs, potentially cutting maximum bets on the machines to £2.

Campaigners against FOBTs claim they are particularly addictive, clustered in deprived areas, and allow gamblers to rack up huge losses.

William Hill will now appoint external auditors to review its anti-money laundering and social responsibility policies and procedures.

Responding to the fine, William Hill’s chief executive, Philip Bowcock, said: “William Hill has fully co-operated with the commission throughout this process, introducing new and improved policies and increased levels of resourcing. We have also committed to an independent process review and will work to implement any recommendations that emerge from that review.

“We are fully committed to operating a sustainable business that properly identifies risk and better protects customers. We will continue to assist the commission and work with other operators to improve practices in the areas identified.”