Ladbrokes and owner of Foxy Bingo hit by £17m payout for backup failures | Economic news

Gaming giant Entain, which owns well-known brands such as Ladbrokes, Coral, Gala and Foxy Bingo, was forced to shell out £17m for “completely unacceptable” backup failures.

The FTSE 100 company, which reported an after-tax profit of £260.7million in 2021, has also been warned by the industry watchdog that it is at risk of having its operating license withdrawn in the event of new serious violations of the rules.

Entain settled in the wake of the biggest ever enforcement action by the Gambling Commission and uncovered anti-money laundering and social responsibility failures.

The regulator pointed out that this was the second time the group had broken rules aimed at making the game safer and crime-free.

Entain Group will pay £14million for failures of its online business LC International Limited, which operates 13 websites including ladbrokes.com, coral.co.uk and foxybingo.com.

It will also pay £3million for failures at its Ladbrokes Betting & Gaming Limited operation, which runs 2,746 gambling establishments across Britain.

All of the £17m will be earmarked for socially responsible purposes under the regulatory settlement, according to the watchdog.

Additional license terms will also ensure that a member of the company’s board of directors oversees an improvement plan and that a third-party audit to review its compliance with license terms and codes of practice takes place in the 12 months.

Gambling Commission chief executive Andrew Rhodes said: “Our investigation has revealed serious failures which have resulted in the biggest enforcement result to date.

“There were completely unacceptable failures in anti-money laundering and safer gaming.

“Operators are reminded that they should never put commercial considerations above compliance.

“This is the second time this operator has broken the rules in place to make gaming safer and crime free.

“They need to be aware that we will be watching them very carefully and further serious violations will make having their operating license revoked a very real possibility.

“We expect better and consumers deserve better.”

Failures in social responsibility included the slowness or failure to minimize the risk of harm to some customers associated with gambling.

The regulator said the operator had only made one chat interaction with an online customer who had spent long periods of time gaming overnight during an 18-month period in which he had deposited £230,845.

Anti-money laundering failures included allowing online customers to deposit large sums without carrying out sufficient source of funds checks, with one consumer being allowed to deposit £742,000 in 14 months without proper scrutiny .

Another, known to live in council housing, was allowed to deposit £186,000 in six months without sufficient cheques.

The company said in a statement, “Entain has entered into a regulatory agreement with the commission to close the matter and avoid further costly and lengthy legal proceedings.

“Entain accepts that certain legacy systems and processes supporting the operations of its UK business in 2019 and 2020 were not in line with the commission’s evolving regulatory expectations in relation to aspects of social responsibility and anti-corruption safeguards. money laundering (AML).

“However, the group also notes the commission’s statement that it found no evidence of criminal expenditures in Entain’s operations.

“The issues raised by the commission relate to the period between December 2019 and October 2020, which predates the many changes in the area of ​​safer gambling and anti-money laundering that Entain introduced. “

The execution case comes amid delays in releasing long-awaited government proposals for the gambling industry, which are set to be postponed again until a new prime minister takes office.

Restrictions on the industry were expected to be announced last month as part of the review of the Gambling Act 2005, as rule changes are needed to cover the growth of betting in line.