One of Britain’s biggest bookmakers agreed to pay £1m to the victims of a problem gambler who had stolen the money he was using to bet, in return for a pledge not to inform the industry regulator.
Ladbrokes showered the gambling addict with thousands of pounds-worth of gifts over two years – including free tickets to football matches and business class flights.
The gambler, a British citizen who ran a property business in Dubai, later admitted to having stolen from his clients in order to fund his high-roller habit, which cost him up to £60,000 in a day.
After five of his victims made a complaint against Ladbrokes for allegedly accepting stolen funds, the bookmaker agreed to pay them a combined sum of £975,000.
But according to a settlement agreement seen by the Guardian, Ladbrokes demanded that they “agree not to bring any complaint or make any report to any regulator in relation to the claim” in order to receive the money.
The industry regulator, the GamblingCommission, which typically does not comment on individual cases, said: “We are enquiring into this matter to ascertain the full circumstances.
“We have clear expectations of all operating and individual personal management licence holders, we expect them to work with us in an open and cooperative way including the need to disclose to us anything which we would reasonably expect to know.”
A spokesman for Ladbrokes said: “We are cooperating with the Gambling Commission where necessary and have no comment to make at this time.”
Text messages and photo evidence passed to the Guardian reveal the extent to which Ladbrokes offered the gambling addict generous incentives, a common practice in the industry designed to ensure the loyalty of high-rollers.
It lavished him with corporate hospitality, including free tickets to Arsenal games, four tickets to see the Floyd Mayweather v Marcos Maidana boxing match in Las Vegas and an invitation to the company box at Royal Ascot.
On one occasion, emails seen by the Guardian indicate that the company agreed to pay for business class return flights from Dubai to London, worth more than £2,000, so that he could attend the north London derby between Arsenal and Tottenham.
The company also sent him Fortnum & Mason hampers at Christmas and placed a birthday gift of £3,500 credit in his account, as well as regular gifts of free bonus chips, to be used to place bets.
The enticements continued to arrive during and after a period in which records seen by the Guardian show that he stopped placing bets for five months.
He claims to have told his account manager at the start of this hiatus that he feared he had a gambling problem and was trying to give up, although there is no documentary evidence of the discussion.
Text messages exchanged between the gambler and an account manager who was personally assigned to him raise concerns about the company’s compliance with regulatory requirements designed to prevent problem gambling and money-laundering.
These rules, a condition of gambling firms’ licences to operate, call on them to check the source of funds of customers placing large bets.
In one message seen by the Guardian, the account manager wrote: “Don’t know if you know about this but there is a new law in place imposed by the Gambling Commission to have on file provenance of funds from its top customers.”
He goes on to ask for a bank statement showing the addict’s income “to comply with the regulator’s policy”. When he didn’t receive a response, the account manager wrote: “Don’t worry mate won’t need this now.”
As the gambler wrestled with his addiction, a fresh text message from the account manager arrived that read: “Just checking no issues your side mate as notice you haven’t played with us for two weeks.”
When he again received no reply the Ladbrokes employee wrote: “Morning mate, I’ve put a £5k bonus in your sports account for you.”
He followed that up with details about a Christmas hamper from Fortnum & Mason, followed by another text to check that the hamper had arrived.
The flurry of text messages arrived within weeks of the gambler losing £60,000 in one day with the bookmaker.
The gambler, who asked for anonymity to protect his children, said: “The scary thing is that the increase in time and money I spent gambling was huge. I cannot believe it was not noticed and checked. I should have been asked questions.
“To make matters worse, Ladbrokes made me a part of a settlement that I never wished to be a part of and I had to leave rehab to sign it. I never asked or received a penny, I lost my home, my family and my company because of my gambling.”
He said he had broken the terms of the settlement because he believed it was in the public interest to do so.
“I hope by me reporting this to the Gambling Commission that some of the victims rightfully get their full money back, but also that this shows them that the operator has no respect for their codes of practice.”
He is still receiving treatment for his addiction from the Gordon Moody Association.
Several major bookmakers have been hit with multi-million pound fines, or voluntary payments in lieu of fines, for failures relating to money-laundering and problem gambling controls.
Several of the cases related to VIP gamblers, who typically receive free gifts, hospitality and preferential treatment to ensure loyalty because of the amount of money they stake, and lose, with the companies they prefer to bet with.
Source: The Guardian