The bookies regulator is taking a gamble over protecting the vulnerable

This week it emerged that Paddy Power was the subject of a Gambling Commission report that found the bookmaker had encouraged a gambler until he lost his home, five...

This week it emerged that Paddy Power was the subject of a Gambling Commission report that found the bookmaker had encouraged a gambler until he lost his home, five jobs and his family.

The man was a frequent user of fixed odds betting terminals (Fobias) – roulette machines that allow bets of up to £100 every 20 seconds. Paddy Power staff became aware that the man was working five separate jobs to fund his gambling and “had no money”. Despite concerned employees informing senior management, shop staff were instructed to try to increase the customer’s visits and time spent in the gambling premises. Senior management were also found to have “repeatedly overruled” a shop manager’s suspicions that another customer was using FOBTs to launder Scottish bank notes. This is especially concerning when 633 suspicious activity reports related to money laundering were flagged in betting shops last year.

FOBTs are not only the most addictive form of gambling, but also the perfect device for high street money laundering. Roulette allows the user to gamble with minimal risk, and the money launderer can then collect their “winnings” and request a receipt. One suspected drug dealer in North Yorkshire was found with more than 400 FOBT payout receipts totalling £36,000. Despite this, the bookmakers are still lobbying against their inclusion in the EU’s 4th money-laundering directive, which would require customers who have staked more than £1,500 to identify themselves.

The investigation into Paddy Power is the third time that corporate bookmakers have fallen short in their responsibility to prevent customers gambling with the proceeds of crime. In 2013, Coral was ordered to pay back £90,000 it had made from a customer found to be money laundering. Nevertheless, the Gambling Commission saw fit to praise Coral, saying: “The operator has cooperated fully with the Commission, and has demonstrated commendable candour and openness during our discussions. The operator is keen to ensure that the learning generated by the challenges they have faced is made available to the gambling industry more widely.” These lessons obviously weren’t shared widely enough, as just one month later the Gambling Commission found that “significant improvements” were required in Ladbrokes’ anti-money laundering procedures.

Still, the Gambling Commission congratulated Ladbrokes for “conducting itself with commendable candour and openness during discussions” and was satisfied that it “acted in good faith”. The Gambling Commission said once more that it provided “lessons for the wider industry”. Less than three years later, the Paddy Power investigation shows that these lessons are yet to be learned.

The regulator’s role is to uphold the licensing objectives in the 2005 Gambling Act. These are that gambling should be fair and open, not associated with crime, and should not harm young or vulnerable people. But the Gambling Commission appears to trust that operators want to uphold the licensing objectives, so when they fall short the regulator concludes that they are doing their best and so just need a little more help. Dame Tessa Jowell has recently criticised the Gambling Commission for its approach and for not using the powers she afforded to it in the legislation.

In 2013, a Gambling Commission director told a parliamentary committee that the regulator has “a statutory aim to permit gambling, which is not really a million miles away from a growth duty anyway. We are quite used to taking an interpretation that builds the desirability of growth into our action.” Is this surprising when the Gambling Commission is funded by licence fees, the biggest contributor of which are the bookmakers?

The Gambling Commission cannot continue to prioritise the growth of the gambling industry over preventing crime and protecting the vulnerable. It is time for the regulator to realise that money laundering and problem gambling are exacerbated by FOBTs, so cutting the maximum stake from £100 a spin to £2 would reduce the harm FOBTs cause, and curtail the risk of money laundering. But for the Gambling Commission to recommend this, it has to stop acting in the interest of the bookmakers and start putting the public interest first.

 Source: The Guardian

RG NEWS Gambling and Social Responsibility
No Comment