Ladbrokes Coral has been ordered to pay £2.3m by the gambling regulator for failing to intervene after two problem gamblers lost £1.3m of stolen money on its casino website.
Days after a government review warned online gambling firms to tighten up controls or face tougher legislation, the Gambling Commission said it found “significant flaws” in the bookmaker’s dealings with two “high-spending” customers.
An “aggravating factor” was that Gala Coral, which merged with Ladbrokes last year, had previously vowed to identify similar cases much sooner, after being hit with an £880,000 penalty in April last year.
The commission said the firm’s Gibraltar-based casino website Gala Interactive should have spotted signs of addiction in two unnamed gamblers, and had also failed to put in place written policies and procedures that could have curbed their behaviour. One of the gamblers lost £837,545 over 14 months while the other lost £432,765 in 11 months, both of them using stolen money.
They have since been jailed, the first for four years for stealing from their employer, the other for four and a half years for acquiring, using or possessing criminal property.
Sarah Harrison, the commission’s chief executive, said: “We will continue to take robust action where we see operator failures that harm consumers and the wider public. It is the responsibility of all operators [...] to ensure they are protecting their customers and step in when there is behaviour that might indicate problem gambling.
“This did not happen in this case and the £2.3m penalty package should serve as a warning to other operators.”
Harrison has taken a tougher stance with the industry since taking over in October 2015, handing out eight penalties worth nearly £16m combined to firms including Paddy Power Betfair, Betfred and 888.
Ladbrokes Coral will pay £1.3m to the victims of the two customers and £1m towards research into the causes of problem gambling, which leading gambling charity GambleAware says is underfunded. It has also volunteered to pay a further £200,000 towards problem gambling research, beyond the settlement with the commission.
The bookmaker’s chief executive, Jim Mullen, said: “Running a gambling company carries a huge responsibility to ensure that it is done so in a safe and responsible manner. When any part of our business fails to meet the required standards, it is right that they are held to account.
“In the two cases reviewed with the commission, it was clear that within our operations, we had not met our own standards or those demanded by the commission.”
He said the failures were “evidence of a lack of priority being given to changes in approach identified in earlier engagements”.
“Being public with our failings is an uncomfortable experience for any business, but we believe it is right that others can see the extent of our mistakes and try to learn from them,” he added.
In a review of gambling regulation published last week, the government called on the industry to improve and speed up efforts to identify and address problem gambling.
“The government, and the Gambling Commission, will be paying close attention to industry progress in this area and will act accordingly,” the review said, adding that “legislative controls” could follow if the commission’s powers were deemed insufficient.
Penalties since Harrison took over Gambling Commission in 2015
Gala Interactive (£2.3m) Failing to spot signs of problem gambling in two customers who lost £1.3m of stolen money.
888 (£7.8m) Record fine for flaws in self-exclusion scheme designed to allow addicts to bar themselves from gambling.
BGO (£300,000) First-ever fine related to advertising, specifically promotions deemed misleading.
Futgalaxy (£265,000) Unlicensed site allowed people, including children, to gambling on Fifa football computer game.
Camelot (£3m) National Lottery found to have paid out on a fraudulent claim.
Betfred (£800,000) Accepted stolen cash from a “VIP” customer, who was offered free drinks and hospitality to encourage him to keep betting.
Gala Coral (£880,000) Failed to question source of funds of VIP gambler who stole money to feed their habit.
Paddy Power Betfair (£280,000) Encouraged gambler to keep betting until he lost his home, jobs and family.