Money laundering, loan sharking, underage gambling, a betting shop murder and the pending review

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The Campaign for Fairer Gambling writes about a Gambling Commission list of betting operators whose licences are at risk and argues that betting shops are no longer the safest place to gamble.


The Gambling Commission has reportedly written to all remote gambling licenses warning them that they have to better “know their customer” to enable delivery of the licensing objectives of preventing an association of gambling with crime and preventing harm to the young and vulnerable.

The Gambling Commission has identified 17 operators with significant failings, with five of these being advised that their license is at-risk. So far business journalists have not yet picked up the story and share values have not been impacted. Is this due to a perception that the Gambling Commission is always making threats it does not carry through with?

Money Laundering (ML) is a criminal offence, so it’s a serious breach if operators either cannot identify it, or, even worse, choose to ignore it. However, the most serious implication is that if remote operators are not delivering appropriate ML control, then how can they possibly be delivering adequate prevention of harm to the vulnerable?

Ironically it was only a month ago that the High Court sided with the Treasury regarding a Judicial Review (JR) application brought by the Campaign for Fairer Gambling, alleging the Treasury had failed to comply with EU ML Directive 4 when excluding certain sectors, specifically betting shops, from ML regulations. The Treasury claimed betting shops were proven low-risk premises, but this was not consistent with the Gambling Commission’s own findings.

Faced with the JR the Treasury brought forward a pending risk assessment from Summer 2018 to October 2017. At the Hearing the Judge commented that the JR raised important issues which deserved an airing at court, but there was sufficient latitude within the ML Directive to allow for each country to satisfy itself on the required standards. This meant the Court would not review the Government’s failure to follow the Gambling Commission’s findings.

Remote operators, in theory, have perfect information on the gambling behavior record of each individual customer, which is not the case in betting shops. The remote electronic records also enable provision of evidence to the Gambling Commission. But in betting shops there is the absence of the data and individual records, so the bookies have more excuses for non-compliance, and detection of failings by the Gambling Commission is much harder.

All this would be bad enough without FOBT roulette at stakes up to £100 per spin. This machine is a great ML tool as it accepts bets on all 37 numbers at the same time, or on 36 out of the 37. Criminal loan sharking is also a consequence of FOBTs as reported in by the BBC last week. A loan shark lending cash to a FOBT loser is almost certain to also use FOBTs for gambling (technically money laundering), with usurious extra paybacks required.

A tragic incident in a Paddy Power betting shop in Birmingham resulted in a fatal stabbing with rumours of a fire at the premises. Malcolm George, the CEO of the Association of British Bookmakers, has yet to admit that his claim that betting stops are the safest places to gamble is contradicted by the evidence.

One of the two FOBT suppliers, Scientific Games (SG), was identified in the Guardian as offering gambling-style games on Facebook. The small print advises that players should be 21 or over, but the reality is that these games are being accessed by the 11 to 16 age group. Neither Facebook or SG was willing to provide a comment – but that’s no surprise when their conduct has been utterly indefensible.

GVC’s pending offer to purchase Ladbrokes has a valuation variance, depending upon the outcome of the DCMS consultation on the FOBT stake. GVC must, therefore, be assuming that no other aspects of the consultation will have a material impact on values. GVC’s offer also does not vary, based on potential action by the Competition and Markets Authority (CMA) on deceptive advertising. Can GVC and Ladbrokes confirm to investors that they are not on the list of questionable operators and have avoided any action by the CMA?

With Tracey Crouch still in charge of gambling at DCMS, there is confidence that the consultation will move in the right direction, even if not far enough. With Matt Hancock now the Secretary of State, the right FOBT action looks more certain. A pro-horse-racing Newmarket MP cannot be regarded as having acted in the bookies’ interests – and a genuinely pro-horseracing MP would surely recognise the negative impact FOBTs are having on interest in the sport.

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