In recent months, the Gambling Commission has issued a number of large fines to operators for breaching regulations and failing to act in a responsible manner towards their customers.
In all of these cases, the companies involved had failed to monitor for and detect vulnerable customers; those gamblers that were potentially staking more than their income and personal circumstances suggested they could afford.
The fines are intended to send a message to the industry that it will be held genuinely accountable for identifying and protecting problem gamblers and that failure to do so will be punished.
Yet behind these fines lies the additional concern that adequate steps have not been taken to ensure criminality is kept out of gambling.
It is well known that problem gamblers will occasionally resort to crimes such as theft and embezzlement to fund their spiralling habit. Detecting the problem gambler early will reduce the risk of such criminality.
But beyond even that is a more subtle and worrying concern: money laundering. Those attempting to launder their ill-gotten gains will frequently gamble with them, accepting a level of loss as a small price to pay for being able to cleanse the money that remains.
The Gambling Commission is making the point in its most recent fines that those controls that are able to identify a problem gambler should also be able to spot gambling for money laundering purposes. Regulated firms are expected to ensure that those controls are in place and effective.
If there is indeed any reluctance to act, the Gambling Commission’s recent activities would seem to send an important warning sign. It’s time for the industry to get their house in order, or suffer the consequences.
“Similarities to Financial Services Regulation In the banking sector, preventing financial crime has long been a top priority for the Financial Conduct Authority, with numerous high-street names coming under pressure to improve their systems and controls. The Gambling Commission is clearly looking at its regulated firms in the same way,” said Nigel Webb, Senior Managing Director, FTI Consulting.
“The last few years have been challenging for the traditional betting industry. Increased competition, especially online, together with negative publicity regarding Fixed Odds Betting Terminals in betting shops, has eroded profits and led to high street betting stores closing in large numbers. There will be many who question therefore whether the industry genuinely cares about tackling criminality and problem gamblers, given the millions they spend each year.
I”f there is indeed any reluctance to act, the Gambling Commission’s recent activities would seem to send an important warning sign. It’s time for the industry to get their house in order, or suffer the consequences.”