Betting company William Hill has been fined by the Gambling Commission after it failed to employ anti-money laundering and social responsibility regulations.
The penalty is the second biggest imposed by the Commission, following last year’s £7.8m action against betting firm 888.
William Hill will pay more than £5m for breaching the regulations and “divest themselves of the £1.2m they earned from transactions with the 10 customers,” the Commission said.
The bookmaker said it had co-operated with the Commission during the investigation. It added it had committed to an independent review and would work to implement any of its recommendations.
System failures within the company
Due to these failures, the Commission identified ten customers of the firm, who were able to deposit money linked to criminal offenses between November 2014 and August 2016. The Commission established that William Hill had profited from these to the tune of £1.2m.
Examples included one customer who deposited about £541,000 in just fourteen months, after telling staff that his income was £365,000. He was later found to be earning £30,000, stealing the additional cash from his employer to fund a gambling habit.
Despite having computer checks in place to flag customers who deposit large amounts over a short period of time, system failures meant these customers were either not reviewed, or simply sent an email warning of social responsibility.
Therefore, the Commission found the company had not done enough to determine the source of the money, nor investigate whether the customers had a habit of gambling.
The Gambling Commission said William Hill’s senior management “failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money-laundering and social responsibility processes were effective”.
Speaking to the BBC, Gambling Commission executive director Tim Miller said William Hill should have been “checking the source of money and understanding their customers and ensuring that potentially vulnerable customers are properly protected”.
Neil McArthur, general counsel for the Commission, described William Hill’s conduct as “a systemic failing… which went on for nearly two years”.
He added: “Today’s penalty package – which could exceed £6.2m – reflects the seriousness of the breaches.”
What does the fine mean for the industry?
With the fine equivalent to little more than a week’s wage for the leading operator in the UK, many are wondering what message is being sent to the gambling world.
“William Hill has just been fined £6.2m by the Gambling Commission for accepting money from criminals without carrying out proper background checks. And this is an industry that talks about ‘responsible gambling’. They’re turning a blind eye to dirty money,” said Labour’s deputy leader Tom Watson on Twitter.
But the company will now have to appoint external auditors to review the effectiveness and implementation of its anti-money laundering and social responsibility policies and procedures.
Will this affect the company’s share prices?
Based in London, England, William Hill PLC is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. The news led to the share price falling by 0.66%.
However, this could also be attributed to last month’s news that the UK government was considering cutting the maximum stake allowable to users of betting shop fixed odds betting terminals (FOBTs) to just £2 from the current £100. Subsequently, all shares of bookies then dropped.
However, William Hill is the largest operator in the UK, with about 2,500 stores and a 25% market share. It was also the first to launch an online website where its most popular bets take place in football, horse racing, tennis, greyhounds, and cricket. The firm made adjusted operating profits of £290m in its most recent trading statement.