The House Doesn’t Always Win – Gambling Operators and the Social Responsibility Code

On 10 October 2019, the Gambling Commission released a public statement following a decision against the well-known betting operator, Betfred. This decision is particularly significant due to the fact that the Gambling Commission exercised their discretion to award the sum of £140,000 to compensate an individual for their losses in this case.

Is problem gambling really a problem?

The Gambling Commission carried out a survey on gambling participation in June 2019, which showed a steady increase in the number of people in the UK regularly gambling since 2015 by 2.7%.

The Commission’s research showed an even bigger increase of 5.3% in the number of people regularly using online betting services in the UK, totalling almost 20% of the UK population.

Furthermore, the Commission also identified that approximately 0.5% of the population are potentially at risk as ‘problem gamblers’, which is a potential of 330,000 vulnerable people nationally.

Gambling Commission decisions – Are betting operators failing?

The Gambling Commission has regularly published public statements following decisions where betting operators have been found to be failing in their adherence to the social responsibility code. The Gambling Commission has adjudicated on a number of cases including:

• July 2019
  – Ladbrokes Coral Group fined £5.9m for “systemic failings” in anti-money laundering and social responsibility;
• November 2018 – Daub Alderney(Online Casino) fined £7.1m for “failing to follow Gambling Commission rules aimed at preventing money laundering and protecting vulnerable customers”;
• October 2018 – Paddy Power Betfair fined £2.2m for “failing to protect customers and stop stolen money being gambled”
• June 2018 – 32Red(Online Casino) fined £2m for failing to protect a customer, and for money-laundering failures;
• March 2018 – SkyBetfined £1m for “failing to protect vulnerable consumers”;
• February 2018 – WilliamHill fined £6.2m for “systemic social responsibility and money laundering failures”

The October 2019 Betfred decision and its implications

The most recent decision from the Gambling Commission against Pefre (Gibraltar) Limited, trading as Betfred, is particularly noteworthy due to the award of compensation given by the Commission to the consumer.

The Commission has no general duty to award compensation to individuals affected by failures of betting operators, and instead usually imposes financial sanctions which operators are required to pay to charities or organisations dealing with problem gambling, such as GamStop, GamCare, etc. However, occasionally the Commission will consider making an award for payment directly to the individual who has suffered loss in order to compensate them for the failure of the betting operator to adequately protect them.

In this recent case, the customer in question had been convicted of a £2 million fraud, of which he had lost £140,000 over a 12-day period with Betfred. The operator had failed to carry out sufficient anti-money laundering checks, and had failed to ascertain the source of funds prior to allowing the customer to gamble the stolen money. Accordingly, Betfred were directed to return the lost £140,000 to the victim whose money had been stolen by the gambler.

How can Ellis Jones help you?

Ellis Jones has a specialist betting and gaming disputes team to assist anyone who feels they have been treated unfairly by gambling firms and/or lost money as a result. We have experience of dealing with and resolving matters in a number of different ways, including submitting complaints to betting companies, and working with the Gambling Commission and other agencies. Please contact us on 01202 525333 or via email at bettingclaim@ellisjones.co.uk to discuss your case and how we may be able to assist you in recovering your losses.