The UKGC has released a report in the wake of Paddy Power's recent protocol failings. The events leading up to the report included Paddy Power mishandling 2 customers in their betting shops and then failing to prevent money laundering with a third online customer. Paddy Power voluntarily pledged to give £280,000 to a socially responsible cause, following the findings of the report.
The UKGC have compiled a report on the whole affair and published their conclusions on how to avoid similar events in the future.
Paddy Power Failings
As with all online casinos regulated under the UKGC, Paddy Power have anti-money laundering and social responsibility duties. Within the last year, 3 instances were found where they had failed to uphold these duties.
Social Responsibility Failings
There were 2 incidents which were included in the investigation into Paddy Power's failure to uphold its social responsibility code. The most serious of the cases involved a customer at a Paddy Power betting shop, who was consistently encouraged to continue gambling.
He was recognized as a problem gambler by a member of staff at the betting shop, but their attempts at preventing the man from returning to the store were dismissed by senior staff.
Anti-Money Laundering Failings
In September 2015, Mark Cooney pleaded guilty to fraud and was sentenced to 28 months in prison, for stealing over £250,000 from 6 customers between 2 banks where he had worked.
Paddy Power became involved in the story, after it was confirmed by the Police that Mr Cooney had wagered a significant amount of money at Paddy Power's online casino during that same period, starting on the 21st April 2014. The UKGC had asked Paddy Power to investigate the matter, to see if Paddy Power's systems had failed to prevent their casino being used to commit crimes, by not flagging up Mr Cooney's spending behaviour.
It was found that Mr Cooney's spending had triggered activity within Paddy Power and caused them to keep tabs on Mr Cooney's account. His account was even labelled as at a medium risk after the initial red flags. However, Paddy Power took no further action to directly contact Mr Cooney and enquire into his finances, nor did they ever take any action on his account.
The UKGC's Conclusions
The UKGC report itself concluded that “We consider that this case provides valuable learning for operators, who should consider reviewing their legal obligations regarding the prevention of money laundering and ensuring that vulnerable people are not harmed or exploited by gambling”.
Richard Watson, Programme Director at the Commission, was far more forceful, threatening that “If operators don’t implement processes and policies aimed at doing this then they risk losing their operating licence. Paddy Power failed in its dealing with three customers and is now facing the consequences of these actions in a very public way.”
The public consequences alluded to, have been levied against Paddy Power in the form of heavy fines, policy changes and further investigation:
- The commissioning of a review of Paddy Power’s AML and SR controls across its retail estate and its AML controls in its remote business to be undertaken by a third party at its expense
- An agreement to the publication of a public statement by the Commission to share learning with the industry and the public
- An agreement to share learning from the cases with the remote and non-remote sectors in a format to be agreed with the Commission
- A commitment to amending policies and procedures to address the shortcomings identified in the course of the investigation
- The payment of £280,000 in total to an agreed socially responsible cause, which represents a sum to remove any profits made from the three customers in question and a voluntary payment in lieu of a financial penalty
- Agreement to contribute £27,250 to the Commission’s costs in investigating this matter
The UKGC have been pretty quick with finalising the report and closing the whole matter, with both a fine and a lesson learned to prevent it happening so easily in the future. Time will tell if their conclusions actually get turned into a tangible change when it comes to crime prevention and customer protection in the industry.
But the UKGC are certainly being a lot more proactive in the last few years when it comes to protecting players and following through on their threats of regulation. All that's clear for now, is that the commonly rebellious attitude of Paddy Power has been taken down a notch with these recent events.