Gambling firms that fail to tackle problem gambling and money laundering face heftier fines and a higher risk of losing their operating licence under a tougher regime to be unveiled by the industry’s regulator.
The Gambling Commission will lay out its new enforcement strategy this month, detailing how bookmakers, casinos and online gaming companies who are deemed to have breached regulations will be punished. The new stance follows a year in which several major bookmakers reached voluntary settlements for failing to prevent money laundering or problem gambling.
The regulator has yet to publish the details of its harsher regime but chief executive Sarah Harrison recently warned gambling firms to expect tougher policing to ensure they were not used for money laundering and “terrorist financing”. In a speech to senior figures in the industry, Harrison said the regulator’s recent work had uncovered “a lack of curiosity, and at worst, a leadership culture which puts commercial gain over compliance”.
She said the commission would abandon the “blanket approach” of reaching settlements with firms that transgress and would be more likely to review their licence to operate in the UK.
“We will put all access to all tools, including licence review […] on an equal footing. Parliament gave us a wide range of regulatory tools for a reason,” she said, adding that sanctions were likely to include “higher penalties”, particularly when a company was guilty of “repeated failings”.
Harrison, who took over as the commission’s chief executive in 2015, has repeatedly signalled her intention to run a stricter regime than predecessors. She called on companies to “raise your ambitions and your sights higher”, urging them to “step up the pace of change” before the publication of the new enforcement strategy.
She said that the regulator would not allow companies to spend months negotiating settlement deals, where they agreed to a voluntary payment when they misbehaved. Last year, the commission arranged voluntary settlements with bookmakers such as Paddy Power, which agreed to pay £280,000 after it was found to have encouraged a problem gambler until he lost five jobs, his home and access to his children.
Betfred reached an £800,000 settlement in June after admitting it had failed to implement proper anti-money laundering controls in accepting stolen cash from a “VIP” custom. In a similar case, the regulator announced an £880,000 settlement with Coral in April, after the bookmaker took hundreds of thousands of pounds from a “VIP” problem gambler who was using the proceeds of theft to feed his habit.
Harrison told gambling firms that the process of agreeing these voluntary payments was too “drawn out”. “To create better incentives for early settlement, we will also be consulting on introducing time-limited settlements,” she said.
This would mean firms who drag their feet in reaching a settlement with the regulator will have to pay more than if they agree an immediate payout. The industry’s trade body, the Association of British Bookmakers, said it welcomed any efforts to uphold high standards of integrity.
“As a sector, we are always ready to work with the commission to raise standards and adhere not just to the regulatory and legal frameworks in place, but to the commitments in our responsible gambling code which go beyond that. Clearly if there are failures that continue or are not addressed then it is right to take action,” said the ABB.
Labour MP Carolyn Harris, who chairs a cross-party group of MPs looking into the impact of fixed-odds betting terminals (FOBTs) applauded the tighter regime, but said the regulator should throw its weight behind curbs on the controversial machines, which allow gamblers to stake up to £100 every 20 seconds.
“I welcome this action from the Gambling Commission, but I implore the commission and the government to take immediate action to properly address the harm being done in communities across the country by the high stakes being waged on fixed odds betting terminals. Only by substantially reducing the maximum stake will we stop the harm being caused by these machines which have been called the ‘crack cocaine’ of gambling.”
The group of MPs, whose financial backers include casinos, the trade body for amusement arcades and pubs firm JD Wetherspoon, is due to publish a final report on FOBTs at the end of this month.
In an interim report published in December, the group urged the government to limit the maximum stake on the machines to £2.
Source: The Guardian