The GB Gambling Commission has ordered Entain to pay a record £17.0m (€20.3m/$20.6m) after it identified a series of social responsibility and anti-money laundering (AML) failings across its online and land-based businesses.

Entain will pay £14.0m for failings from LC International Limited (LCI), which runs Entain’s online brands including Ladbrokes.com, Coral.co.uk and Foxybingo.com.

The remaining £3.0m is for the Ladbrokes Betting & Gaming Limited (LBG) land-based business, which operates 2,746 betting shops across Great Britain.

All £17m will be directed towards socially responsible purposes as part of a regulatory settlement, while the Commission will impose a series of additional licence conditions, with an Entain board member tasked with overseeing a new business plan for improvement.

In addition, a third-party audit of compliance with the Licence Conditions and Codes of Practice will take place within 12 months.

As a result of the failings, Gambling Commission chief executive Andrew Rhodes warned that the regulator could revoke Entain’s licence in the event of further failings, particularly as the business had also paid a £5.9m penalty for similar failings in 2019. Entain, meanwhile, noted that the failings had come before a number of new responsible gambling initiatives, such as the launch of its ARC player protection tool.

Online failings

Breaking down the failings across the two businesses, the regulator said between December 2019 and October 2020, failings at online-focused LCI were identified in relation to its AML policies, procedures and controls, as well as deficiencies in responsible gambling, and that certain customers who were the subject of AML restrictions were able to open accounts on different brands.

The Commission said, and Entain acknowledged, that the operator’s risk assessments did not refer to terrorist financing, nor did it make specific reference to customer nationality or business risks in the geographical risk section.

Entain also accepted that there were weaknesses and shortcomings in its policies and procedures, with the Commission having identified that certain customers were able to deposit large amounts without an interaction, such as a source of funds (SoF) check, being triggered.

Examples of this included a customer depositing £742,000 in 14 months. The operator established the customer was a director of a newly formed company but did not know their salary. At the time of the assessment, the customer had lost £59,000 in the preceding six months.

Another player made £186,000 in deposits over the life of a six-month account, losing a total of £31,000, including £25,000 in the three months prior to the assessment.

The Commission said the operator placed an overreliance on recycled winnings with some players, while also ruling LCI should have conducted Enhanced Customer Due Diligence (ECDD) checks sooner with others.

With the latter point, the regulator highlighted a number of cases, including how a player deposited £157,698 in two months. Entain first requested SoF evidence on 9 August 2020, but the customer was allowed to continue gambling until the account was restricted on 27 August. LCI later closed the account on receipt of the customer’s SoF evidence due to concerns about the legitimacy of the evidence.

Another player deposited £524,501 in the period of the failings, incurring losses of £75,600. The customer was not requested to provide SoF evidence until April 2020, which they refused to provide, and the account was subsequently closed.

In addition, Entain was found to have placed excessive reliance on open-source information in certain cases. This included a player who was believed to be wealthy based on assumptions made during open-source checks, but, prior to a SoF request in August 2020, no evidence had been obtained to show that the assumed wealth was being used to fund the account. The customer deposited £140,700 in the period with an overall net loss of £60,300.

However, the Commission’s review of the specific customers identified in the compliance assessment found no evidence of criminal spend with the licensee.

Entain also accepted it was slow to interact with, or did not interact with, certain customers. Examples of this included a customer making large deposits overnight and in the early morning, and despite being referred to the safer gambling team, they only received one chat interaction.

It was also discovered that the player’s account had previously been permanently closed, but an analyst error in November 2018 led to the account being reopened.

Customers whose accounts were closed with one Entain brand were able to open multiple accounts with its other brands.

Retail division

Switching attention to the retail-focused LBG, between December 2019 and October 2020 the operator accepted weaknesses and shortcomings in its policies and their implementation, with some customers able to stake large amounts without been monitored or scrutinised to the standard expected by the Commission.

One high-staking cash customer regularly loaded cash of £500 or more onto shop terminals, placing their first bet on 10 January 2020 and staking around £168,000 in the eight months after, losing £28,000. They were not considered for AML checks, largely due to not being referred for review by shop staff and not hitting the LBG’s AML threshold triggers.

The licensee acknowledged that it did not commence due diligence checks in relation to this customer until it conducted a review as part of its governance process in September 2020.

Another player wagered £440,474 in 12 months and lost £68,867. LBG admitted that further formal AML thresholds and checkpoints would have been appropriate in respect of stake levels and has confirmed that it has since amended its approach.

The Commission again noted that it found no evidence of criminal spend with the licensee during the compliance assessment.

In addition, Entain acknowledged that it was slow to interact or did not interact with certain customers. In one case, a player in July staked £29,372 and lost £11,345, with both of these figures being significantly higher than in any other month, but was not escalated for a safer gambling review by the shop.

In other cases, despite training, local staff or area managers could have escalated potential concerns sooner. One such incident involved a player who spent £173,285 and lost £27,753 between October 2019 and October 2020, while another, known to staff as a delivery driver, lost £17,000 between October 2019 and October 2020.

The regulator also said that while LBG was evaluating the adequacy of certain individual customer interactions, it should have conducted such evaluation to a higher standard and recorded the same more clearly. This was evident with one player who staked £218,765 and lost £44,597 between October 2019 and October 2020.

In its interactions with certain customers identified by the Commission, the regulator said that affordability ought to have been considered sooner, while there were also instances where interactions were not specifically adapted depending on the extent of potential harm to a player.

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