One of the UK’s largest bookmakers has been caught paying the bill of a problem gambler after he ripped off his clients to feed his habit.
Ladbrokes allegedly agreed to pay £1m ($1.26m) to victims of a problem gambler after he stole money to place bets, in return for their promise not to inform the gambling industry regulator. The company gave the problem gambler thousands of pounds worth of gifts over a two-year period, including free tickets to sporting events and business class flights, yet it was lax in its money laundering checks.
Gambler stole from clients
The gambler in question was a British citizen who was living in Dubai while running a property business. He admitted to stealing from his clients to fund his luxury lifestyle and gambling habit, which cost him up to £60,000 ($75,700) a day. Five of his victims made complaints against Ladbrokes for accepting allegedly stolen funds. The bookmaker agreed to pay them a total of £975,000 ($1.23m) to stop them from taking their complaint to the industry regulator.
According to the settlement agreement that was seen by the Guardian, Ladbrokes demanded that the gambler’s victims “agree not to bring any complaint or make any reports to any regulator in relation to the claim” in exchange for the agreed payment.
Although it does not generally comment on individual cases, the Gambling Commission, said: “We are inquiring into this matter to ascertain the full circumstances. We have clear expectations of all operating and individual personal management license holders; we expect them to work with us in an open and cooperative way, including the need to disclose to us anything which we would reasonably expect to know.”
A spokesperson for Ladbrokes released a statement, saying: “We are cooperating with the Gambling Commission where necessary and have no comment to make at this time.”
Money laundering checks and generous gifts
Several major gaming operators have been hit with fines or voluntary payments for failing to comply with money laundering regulations and problem gambling controls. The regulator has received millions of pounds from gambling operators, including William Hill, Ladbrokes, Paddy Power, SkyBet, and Paddy Power.
Several of these cases relate to high-spending VIP gamblers who typically received lavish gifts, hospitality packages, and special treatment to ensure they remain loyal to their favorite gambling company. The Guardian was also provided with evidence suggesting that the gambling addict was offered generous incentives, a common practice in the industry to keep high-spending gamblers coming back to the same provider.
The company offered the gambler corporate hospitality packages, including free tickets to soccer games and boxing matches, as well as an invitation to the company’s box at Royal Ascot. It appears the company also agreed to pay for the individual to fly business class from Dubai to London so that he could attend the London derby soccer match between Arsenal and Tottenham.
Hampers and birthday credit
The gambler was also sent Fortnum & Mason hampers at Christmas and a £3,500 ($4,415) credit gift on his account for his birthday. The gifts were even sent to the player after he had stopped using the company to place bets for over five months. While there is no evidence of the claim, the gambler said that he informed his account manager that he wanted to take a break from gambling because he thought he might have developed a gambling problem.
The gambler was sent a string of text messages from his account manager asking if everything was okay when he stopped gambling, with one even allegedly saying the company had put £5,000 ($6,308) of free credit on his sports betting account.
The anonymous gambler told the Guardian: “The scary thing is that the increase in time and money I spent gambling was huge. I cannot believe it was not noticed and checked. I should have been asked questions. To make matters worse, Ladbrokes made me a part of a settlement that I never wished to be a part of, and I had to leave rehab to sign it. I never asked or received a penny; I lost my home, my family, and my company because of my gambling.”
With the crackdowns from the regulator over the past year, these types of claims may just be the start of a cultural change within the industry. Operators should be following the fall out closely.