Investigation Leads to Leak of Documents
Just last week their boss was arguing for better treatment of customers, but now well-known gambling operator Ladbrokes is in hot water over some of its practices. Documents leaked to a Scottish newspaper, The Daily Record, suggest that players have been restricted in placing higher stakes for some bids, but encouraged in others. Ladbrokes is accused of rigging the system due to how it manages client risk.
The documents suggest that Ladbrokes has used risk assessments to profile accounts with a “stake band factor.” Customers that have been assessed as being “HVC,” which The Record assumes to mean high-value customer, appear to have been encouraged to increase their stake by up to five times the original bet.
The bookmakers did this in a number of ways, such as offering promotional free bets, special odds, and complimentary tickets for sporting events.
Similarly, cash-back incentives have been offered after select customers lost large amounts. This tactic is well-known in the industry to entice gamblers back to the table after a particularly hard roll.
The internal documents say, “Client Risk is responsible for assessing customers and allocating an appropriate Stake Factor, where SF is an indication of customer value.”
System-Generated “Stake Factor”
The document reveals that stake factor determines the percentage of a system-generated standard bet that the customer can place. New accounts were rated at 1.00, meaning that the customer can bet any amount. Unprofitable accounts or those thought to be “bot” accounts were being marked at anything from 0.10 to as low as 0.01.
Accounts determined to be VIP or HVC (high-value customer) were stake factored anywhere between 2.00 to 5.00, meaning 200-500% of their intended bet could be placed.
Ladbrokes has responded to these reports by saying that this system is outdated and is not used anymore.
Widespread Problem
Although these specific documents come from Ladbrokes, campaigners, customers, and politicians have said they believe these systems were common throughout the betting industry.
Brian Chappell, from Justice for Punters, said: “This leaked document is one example of how gambling corporations profile customers from the moment they open an account. It shows how customers are ruthlessly rated. If a customer is seen as potentially unprofitable, they will not be allowed to place the bet they want. For example, a customer who is rated 0.01 will be allowed a 10p ($0.13) bet instead of a £10 ($12.92) one.”
Chappell added: “Most of the techniques used to collect customer data are legal but some are not. UK regulators, bizarrely, choose to ignore this illegal corporate activity. Gambling corporations and the Gambling Commission see this as being fair business practice but, in effect, it has become a ‘bankrupt or ban’ policy.”
System Could Be Put to Good Use
Ironically, although this system is under fire right now, another version of the model has been suggested to control gambling-related harm, where those who self-exclude are given a score to restrict their betting.
The option is there to limit stakes for customers who wish to place a stake restriction on themselves. This could be a potential option for those customers who would like to restrict themselves rather than a complete ban. It could also be a great tool for flagging customers in danger of gambling-related harm.
Ladbrokes and regulators have yet to comment further on the allegation of player profiling, apart from Ladbrokes’ assertion that this system is no longer used.