UK Slaps Betfred with $3M Fine Over Anti-Money Laundering Violations

Posted on: September 28, 2022, 09:42h. 

Last updated on: September 30, 2022, 04:24h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Betfred is expanding its reach in the US, but is running into trouble back home. The UK-based sportsbook Fred Done, founded in 1967, recently received a seven-figure fine from the UK Gambling Commission (UKGC).

Betfred
A Betfred sports betting shop in Birmingham, England. The online Betfred brand, run by Petfre (Gibraltar) Limited, is facing a $3M fine for violating the UKGC’s Anti-Money Laundering and social responsibility rules. (Image: Visit Birmingham)

The UKGC accused Petfre (Gibraltar) Limited, which operates online betting platforms Betfred and Oddsking, of not adhering to its anti-money laundering (AML) rules. It’s also charged with failing to follow social responsibility regulations.

This isn’t the first time Betfred has come under fire by the regulator. The company had to pay a fine in 2019 for not complying with AML policies.

No Control Over Accounts

In hitting Betfred with a ￡2.87-million (US$3.06 million) fine, the UKGC explained that the company had “alarming failures.” It cited as an example one customer who lost ￡70,000 (US$74,781) in 10 hours — less than 24 hours after opening an account.

In another instance, a user deposited ￡20,700 (US$22,105) and then lost just under half of it. Although Betfred reviewed the user’s financial situation at the time, it didn’t take any further action. Only after four months had passed and the user lost ￡69,371 (US$74,122) of a ￡323,715 (US$345,921) deposit did Betfred respond.

With Betfred’s longevity in the gaming space, the UKGC believes it should have been in a better position to immediately address situations like these. The company received an official warning over the failures, with the UKGC threatening a harsher response if it doesn’t take corrective measures.

There were also a number of violations the gaming watchdog found in relation to Betfred’s AML oversight. The UKGC determined that it didn’t pay close enough attention to customer specifics, and employed gaming thresholds that are inconsistent with expected monitoring operations.

Betfred, which recently launched in its sixth state in the US, also missed the mark in providing proper AML training to its employees. In addition, it hadn’t fully rolled out the compliance mechanisms the UKGC expects of all operators.

The company accepted the UKGC’s decision and said that it will review its internal policies. At the same time, it highlighted that the regulator’s assessment wasn’t an indication of criminal activity.

UKGC Rakes in Millions

The Betfred fine is the latest in a steady string the UKGC has collected. In August, it fined Spreadex and Entain for multiple failures, including violations of AML standards.

Spreadex received a fine of ￡1.36 million (US$1.6 million), although this was drastically less than the ￡17 million (US$21 million at the time) Entain paid. LeoVegas also received a ￡1.32-million (US$1.6 million) fine last month.

The UKGC recently updated its rules regarding social responsibility. It began an update in April, but then pushed the start date back in order to give operators more time to comply.

Gaming companies should now interact with most customers on an almost continuous basis. This is a measure the UKGC expects will reduce potential gambling harm. However, the companies also have to be flexible.

The regulator admits that its guidelines are a constant work in progress, and that it will likely introduce amendments and changes on a regular basis. Although some of the new regulations are now in force, others are coming later. The UKGC will publish a new update in December and implement the additional changes next February.