Paddy Power Betfair pays £2m penalty for AML and customer protection failings
UK Gambling Commission investigation finds "significant amounts of stolen money" was used by two customers to gamble via the Betfair Exchange
Paddy Power Betfair (PPB) has been hit with a £2.2m penalty package after a Gambling Commission investigation found it had failed to prevent “significant amounts of stolen money” being gambled via the exchange and adequately interact with problem gamblers.
The UK regulator this morning revealed that PPB had allowed two customers during 2016 to gamble stolen money via the Betfair Exchange, in breach of the Gambling Commission’s guidance on anti-money laundering.
The investigation found three retail and online customers had not received sufficient source of wealth and identity checks.
One customer had gambled money stolen money from his employer, a charity, which will be repaid from the £2.2m settlement. PPB will divest £498,508 of the monies received, while paying £50,045 of the Gambling Commissions investigation costs.
The penalty package also covers other responsible gambling issues, where several customers were allowed to continue gambling despite indicators of problem gambling being identified by the bookmaker.
Richard Watson, Gambling Commission executive director, said: “As a result of Paddy Power Betfair’s failings, significant amounts of stolen money flowed through their exchange and this is simply not acceptable.”
He added: Operators have a duty to all of their customers to seek to prevent the proceeds of crime from being used in gambling.
“These failings all stem from one simple principle – operators must know their customer.
“If they know their customer and ask the right questions then they place themselves in a strong position to meet their anti-money laundering and social responsibility obligations.”
Responding to the fine, a statement from PPB said: “PPB acknowledges that certain policies in force at the relevant time were ineffective. It had already evolved those policies, and that process remains ongoing.
“PPB recognises there have been considerable learnings from these cases and has invested in improving its AML and responsible gambling processes.”
PPB’s share price was largely unmoved at the time of writing.