Are fines enough to motivate operators into meaningful change?

Last month the UK Gambling Commission sent shockwaves through the iGaming world after they slapped a record £11.6 million fine on betting firm BetWay for accepting stolen money from vulnerable players.

A lengthy investigation centering around seven VIP players highlighted several worrying issues. Not only did they discover that BetWay had failed to properly check the source of player funds, but they had also allowed them to continue betting, even though problem accounts had been flagged as a potential risk.

It wasn’t until the police had gotten involved, confirming that players were using stolen money to fund their betting that the operator took decisive action and closed the accounts.

Unfortunately, systemic failings such as this aren’t isolated incidents, we’re seeing operators continuously make crucial mistakes in their vetting processes, particularly when it comes to VIP players, their source of funds and whether they can actually afford to be betting the sort of amounts that they are doing on a regular basis.

Extreme cases involving high value players continue to crop up repeatedly, in 2018 a  self-excluded VIP player was visited at his overseas home by a casino manager, shortly after this player lost £1 million in 24 hours. This is just one sad example of a much larger string of misdoings by both land based and online operators.

These failings can make or break livelihoods, especially during such an unsettling time in which uncertainty is rife. It’s down to operators to take responsibility, look past the profits and truly own their social responsibility and safeguarding measures.

Are the Gambling Commission doing enough to deter bad practices?

Ultimately, the Gambling Commission has the power to strip an operator of their license if they deem fit. However, despite having punished a number of major bookmakers and online casinos on more than one occasion, the Commission have always opted for heavy fines.

This has led to severe criticism from those in positions of power. Labour MP Carolyn Harris, chair of the gambling-related harm all-party parliamentary group, asked how exploitative an operator has to be before they have their license suspended?

Whilst a lot of what the all-party parliamentary group has to say must be taken with a pinch of salt (As it’s clear their objective is to completely change the face of betting in the UK) it’s hard not to argue with Harris’ statement when there are operators out there that repeatedly break the rules who are financially sound enough to buy their way out of trouble time and again.

It’s also important to state that these huge multi-million pound fines are not there to line the pockets of the Commission. The majority of the funds recouped from operators are paid back to victims of stolen funds, solicitors and other key costs. 

Going through the list of operators that have been fined in the last five years practically reads as a who’s who of the gambling industry. Nearly every major operator has breached rules one time or another and let things slip through the net. 

In the first quarter of 2020 (From January to March) alone operators were fined a whooping £25.3 million. A stark and shocking contrast to the previous year in which only £16 million in fines were collected. It’s clear operators aren’t adverse to paying the fines and carrying on with business as usual, which leads us to wonder… Just how close will operators cut in 2020? 

Global COVID-19 pandemic forces operators to up their game

This worrying upward trend of operator fines may actually come to a grinding halt sooner rather than later, however, this isn’t necessarily down to the fact that operators are being more responsible when it comes to vulnerable and high value players.

Instead this change is likely to happen because of the ongoing COVID-19 pandemic that has gripped the world over the last few months. With sports betting completely off the table for the foreseeable future operators have found themselves in a desperate scramble to find viable betting alternatives for their casual players. 

The loss of thousands of casual gamblers, who tend to place regular wagers on accumulators, in-play football and other sports including events such as last month’s Grand National has really hurt operators. Especially when you remember that the National would have seen around £250 million worth of bets placed in the UK alone had it gone ahead.

To the relief of operators, players have turned to online slots and other forms of gambling to fill the void left by a lack of more traditional betting options. However, this has sent alarm bells ringing in the ears of many including the government, anti-gambling charities and of course the regulator who all feared that operators might become much more aggressive in their approach.

Whilst a handful of operators did initially push alternatives such as virtual sports, others acted quickly to ease concerns that they wouldn’t capitalise on the ongoing situation by promising not to target potentially vulnerable players with marketing materials.

As it became more apparent that gambling activity could boom due to the situation, the Gambling Commission sent out communications to all licensed operators reminding them of their duties as socially responsible businesses.

Bookmaker William Hill, who themselves were handed a hefty £6.2 million fine in 2018 after it was found that funds were linked to criminal activity, promised to be “extra sensitive” with regards to their marketing during the crisis.

Elsewhere 888 Holdings and 32Red reaffirmed their commitment to responsible gambling whilst Bet365 cut some of their advertising in the last few weeks. Popular no wagering casino PlayOJO sent their players a notification informing them that they could set playing limits or stop gambling altogether if they felt things had become excessive. 

The ramifications of what would happen to an operator that flaunted these new makeshift  rules created by the Gambling Commission is yet to be seen, however considering they’ve shown little restraint in severely punishing wrong-doers in the first few months of 2020 we have good reason to believe they’d come down hard on them with potential fines reaching into the millions. But is a fine enough, especially now?  

Does it seem as if operators have gotten the message?

It’s genuinely difficult to tell whether operators are doing everything they should with regards to their social responsibilities right now, because if they are doing everything by the book then we shouldn’t hear of anything at all, and if we do it’ll be months down the line once a full investigation has taken place.

However, we can be buoyed by recent developments that have seen the Gambling Commission join forces with over 30 UK operators, co-ordinated by the Betting and Gaming Council, in which they’ve all agreed new measures to help make gambling safer.

This includes restrictions on controversial VIP programmes which will now mean that operators will no longer be able to recruit players under the age of 25, these players will also have to go through full financial background checks before they can be approved onto the programme. 

In addition to this all VIP and reward programmes will now have a full audit trail which details the decision making processes from start to finish, highlighting senior oversight and overall accountability. 

On one hand, it’s fantastic that this working group has been formed and meaningful change is just on the horizon, however, on the other hand it’s bitterly disappointing that it’s taken the Gambling Commission and the Betting and Gaming Council combined force to pull everyone together themselves and push meaningful change. 

If operators want to stay out of the headlines and help clean up the reputation of the  gambling industry as a whole then work must begin internally at each and every operator’s own head office. 

If the last few years are anything to go by then it’s obvious that fines aren’t enough to stop operators from pushing the boundaries of what’s acceptable. If the latest measures don’t go some way towards stopping this trend then it’s down the UK Gambling Commission to begin showing some serious authority in the fight to protect vulnerable players.

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