The crimes, the abuses and the consequences

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The Campaign for Fairer Gambling shows how inadequate gambling regulations currently are when it comes to preventing crime.

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The Dundee Courier reported that “William Hill paid £500,000 to Dundee City Council following fraudsters conviction,” detailing an incident where a gambler had stolen over £1 million from the local council to feed a gambling addiction. The “ex-gratia” payment made by William Hill was not a legal obligation at the time. William Hill, with several shops in Dundee, was unwilling to comment, while a councillor is taking up the matter with DCMS.

The councillor who had investigated the initially undisclosed source of the ex-gratia funds described the whole situation as “grubby”. When a criminal gambles the proceeds of crime, then that is in itself a crime of money-laundering. The bookies’ trade body, the ABB, of which William Hill is one of two significant members, represented to the Treasury that betting shops are “proven low-risk” for money laundering.

The Treasury decided that bookies should be excluded from the latest EU regulations on money-laundering, contradicting the Gambling Commission’s advice that they were high-risk premises, due to the presence of £100-a-spin FOBTs. At the beginning of the year, the Gambling Commission advised that it had written to 17 licensees expressing dissatisfaction of their monitoring of money laundering and problem gambling, indicating that five of them were at risk of losing their licenses. However, when asked to comment on this case the Gambling Commission was silent.

The government is now able to use ‘Unexplained Wealth Orders’ to act against money launderers, whereby identifying an expenditure more than £50,000 without adequate explanation of sources of the funds could result in confiscation of assets. If £50,000 is the threshold for that, how is it possible that William Hill was unable to understand how a Dundee City Council employee could afford to lose over £500,000?

Malta Today reported, “Mafia betting boss arrested, Maltese license suspended”.  Malta is just one of the offshore centers that welcomed remote gambling operators with low taxes and very light touch regulation. Many sites from Malta have legitimate access to British gamblers as they are licensed by the Gambling Commission, but those not licensed here will be doing so illegally. The 2014 Gambling (Licensing and Advertising) Act failed to prevent this from happening.

Another failure of that Act was that it did not restrict the practice of sign-up and bonus offers with onerous terms and conditions. This resulted in an investigation by the Competition and Markets Authority (CMA) which started in October 2016. Whilst the CMA had originally suggested the results of the investigation would be available much sooner, it only released them recently. Anyone wanting to evaluate the CMA findings and advise the DCMS review on the matter was therefore prevented from doing so as the DCMS review had already closed.

Matt Zarb-Cousin had an opinion piece published in the Independent entitled “Regulators have admitted that online bookies have been ‘conning’ the public – but they haven’t gone far enough” highlighting that “after years of trapping players money and raking in billions unfairly what penalty was given to operators? None. They were just asked very nicely to stop wagering requirements.”

The T&Cs required stakes to be turned over so many times before withdrawal was permitted that usually, the expected value of both the bonus and the deposit was zero. This would be contrary to any rational interpretation of the ‘fair and open’ licensing objective of the 2005 Gambling Act.

William Hill, Ladbrokes and PT Entertainment (a PlayTech entity) were named as agreeing to discontinue these offers, with other operators expected to follow. The Gambling Commission is now holding another consultation into offers in gambling ads as a consequence of the CMA action.

The impact of the CMA action on share prices of the named parties was non-existent. The light touch mantra of the CMA and the Gambling Commission is that only a prosecution that can determine if the law has been broken. Regulators have been at fault for years for allowing this behaviour. No fines, no license refusals and no naming of individuals means no real consequences. Will DCMS allow this whitewash to continue?

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