The UK Gambling Commission recently announced that Entain Group, an international sports betting and gaming company, must pay a total of £17 million after a Commission investigation uncovered social responsibility and anti-money laundering failures at LC International Limited (LCI), Entain’s online business, and Ladbrokes Betting & Gaming Limited (LBG), Entain’s retail business that operates more than 2,000 gambling premises throughout Britain. In lieu of a financial penalty, Entain agreed to pay £14 million for LCI’s breaches and £3 million for the deficiencies found at LBG. According to Andrew Rhodes, the Gambling Commission chief executive, these serious failures have resulted in the largest enforcement outcome to date.
The Commission reports that, between December 2019 and October 2020, LCI and LBG breached several gambling license conditions and Social Responsibility Code Provisions for failing to implement adequate Anti-Money Laundering (AML) policies, procedures and controls and having deficiencies in its responsible gambling policies, procedures, controls and practices, including weaknesses in implementation. According to the Commission, among the social responsibility failures were insufficient interactions with customers to minimize their risk of experiencing harms associated with gambling; allowing customers, some of which were the subject of AML restrictions, to open multiple accounts under Entain’s different brands; and failing to escalate customers with relatively large losses in a single month. The alleged AML deficiencies include a failure to conduct adequate risk assessments to determine money laundering and terrorist financing risks, particularly in its online business; allowing customers to make large deposits (i.e., £742,000 in a 14-month period) without appropriate Source of Funds (SOF) checks; and allowing customers to stake large amounts of money for months before SOF checks were conducted. According to the Gambling Commission, one customer in particular was allowed stake a total of £168,000 over an 8-month time period before due diligence checks were performed.
On August 17, 2022, Entain released a statement confirming that it had entered a £17 million regulatory settlement with the Gambling Commission and indicated that the settlement was entered “in order to bring the matter to a close and avoid further costly and protracted legal proceedings.” The company also acknowledged that between 2019 and 2020 certain legacy systems and processes were not in line with regulatory expectations. However, since the deficiencies were discovered, Entain reports that it has enhanced its compliance program that utilizes AI technology which has shown more than 80 percent risk assessment accuracy. Entain further reports that, as part of the settlement, it agreed to appoint to Board sponsor to oversee the implementation of any deficiencies identified in the 2020 compliance assessment and to conduct an independent audit of its policies and procedures at a later date.