Industry reaction to William Hill’s £19.2m penalty over social responsibility and AML failures

Shockwaves were sent across the UK gambling industry and further afield this week after William Hill agreed to pay a record £19.2m regulatory settlement to the UK Gambling Commission (UKGC) following an investigation which revealed social responsibility and anti-money laundering (AML) failures.

WHG (International), Mr Green Limited and William Hill Organisation have all been found to have “widespread and alarming” failures, according to UKGC CEO Andrew Rhodes.

The settlement eclipsed the £17m paid by Entain in August 2022 for its own previous regulatory shortcomings.

Perhaps the most damning revelation in the Hills investigation was that the UKGC confirmed it had given “serious consideration” to a licence suspension.

In one instance, a customer was allowed to open a new account and gamble £23,000 in 20 minutes without any affordability checks.

888, which acquired William Hill International last year in a £1.95bn deal, said it had implemented a “rigorous action plan” after the acquisition completed and was committed to working with the UKGC and other stakeholders to raise compliance standards in the industry.

EGR spoke to several industry heads to gauge their reaction to today’s news and what the future could hold for the UK market, the UKGC and operators moving forward.

Richard Williams, Keystone Law’s gambling partner

“The £19.2m financial penalty issued by the Gambling Commission to 888, the new owner of William Hill, will be a wake-up call to any entity looking to acquire a gambling business operating in Great Britain. When 888 acquired the non-US assets of William Hill from Caesars in July 2022, it would have known about the Gambling Commission’s ongoing investigation which resulted in this penalty. This would have been disclosed as part of the due diligence process when 888 acquired the business. The anticipated penalty would therefore have been reflected in the £1.95bn purchase price that 888 ultimately paid to acquire the business.

“The £19.2m penalty issued to 888 for anti-money laundering and social responsibility failings makes it clear that the new owner of a gambling business cannot avoid a sanction for the regulatory failings of a previous owner.

“It’s clear that the Gambling Commission was considering suspending the William Hill operating licences due to the nature of the regulatory failings. Some commentators will say that this action would have been unfair to 888 as it did not own William Hill at the time of the failings at WHG (International) Limited, Mr Green Limited and William Hill Organisation Limited. However, 888 has had its own regulatory problems in the past, as it was fined £9.4m by the Gambling Commission in March 2022 for anti-money laundering and social responsibility failings, following a penalty of £7.8m in 2017 for failing vulnerable customers.

“The Gambling Commission has indicated that the regulatory position at William Hill has improved significantly since 888 took over the business. Time will tell whether the expanded business has taken steps to finally resolve these issues. From a business perspective, implementing rigorous anti-money laundering and social responsibility procedures is likely to slow down customer spending and ultimately reduce revenue for the combined business.

“While the Commission has indicated that there are signs of improvement and that the industry is doing more to make gambling safer and to prevent criminal funds being used for gambling, the constant stream of financial penalties being issued suggests that this is not the case, albeit these investigations can take many months or even years to be concluded, so we are still looking at historical failings.”

@andrewjonrhodes so we see yet another set of ridiculous transgressions by William Hill. What does a bookmaker have to do to actually lose its license? Some might speculate that the GC is happy to keep collecting fines rather than hand out proper punishments. Am sure that’s not…

— Luke Paton (@Golfpunter1) March 28, 2023

Matt Zarb-Cousin, director of Clean Up Gambling

“People are fed up with seeing these failures time and again; a cycle of penalties getting paid as a cost of doing business and then the harm continuing. This sector makes the vast majority of its profit from people addicted or at risk, it cannot be trusted to self-regulate. Stronger affordability rules and sanctions are needed in the forthcoming gambling white paper to prevent these harms occurring.”

Felix Faulkner, solicitor at Poppleston Allen

“This case highlights the importance of working proactively and swiftly with the Gambling Commission when issues come to light. CEO Andrew Rhodes has stated that a licence suspension was seriously considered, but that because the operator worked with the Commission to quickly put in place improvements, a regulatory settlement – albeit the largest in the Commission’s history – was agreed upon instead. The Commission reserves its power of suspension and revocation for the most serious cases, however, it’s entirely possible we could see one of the big operators lose their licence in the future.

“This case also highlights the fact that the era of large enforcement payments is far from over, with this new record regulatory settlement amount coming only seven months after Entain’s at-the-time-record payment of £17m. It’s clear the Commission has no intention of letting up when it comes to compliance failings and operators are strongly advised to be proactive rather than reactive when it comes to any historic failings.

“Many of the failings identified at William Hill took place in the pandemic period, so operators need to be mindful that although the worst of the Covid-19 disruption may be behind us in some respects, any failings that occurred during that period may still be looked at by the Commission.”

“William Hill have behaved abhorrently but I’m not surprised because I know the industry”

GwL Strategy Director @WillProchaska reacts to William Hill’s record fine on @GMB a few moments ago #StopGamblingSuicidespic.twitter.com/PxvCZf8Aw8

— Gambling with Lives (@GambleWithLives) March 28, 2023

Melanie Ellis, partner Northridge Law LLP

“Operators will no doubt be concerned to see a £19.2m penalty, particularly following other large settlements in recent months, however the size of this penalty very much reflects the overall impact of the William Hill group of companies through their considerable customer base. I would like to highlight a few practical takeaways for operators: firstly, the Gambling Commission’s comments in its public statement demonstrate the importance of limiting the sums customers are able to deposit or bet, pending completion of source of funds and affordability/financial risk checks.

“It may be that the customers referenced in today’s action would have eventually been able to show that their deposits came from a legitimate source and were affordable, however, it is their ability to spend the money before checks were completed that has been criticised as it demonstrated weaknesses in the licensees’ processes. The next takeaway is the importance of taking action as soon as issues are identified by the Commission, whether that be during a compliance assessment or in later correspondence.

“Andrew Rhodes has made it clear that these licensees only narrowly avoided licence suspensions by taking swift remedial action. Finally, this case reiterates the need to provide for potential fines and settlements when buying or selling a gambling business. Although in this case the licence review was well under way when the sale to 888 completed, the amount of the eventual fine was unknown and the fact that a licensee is under new ownership will not reduce any regulatory penalty applied for past failings.”