In February 2016, Paddy Power came under a great deal of fire when it was discovered that they had encouraged a known problem gambler to continue gambling. The whole fiasco resulted him losing five jobs, his home, and access to his children. Not a brilliant situation. The Gambling Commission noted that some large operators such as Paddy Power were not doing enough to protect problem gamblers. It also noted that the betting machines that it was using were making it easy to launder money. Paddy Power ended up making a voluntary donation of £280,000 to various causes. Politicians are campaigns then tried to come up with a way that this situation could be prevented in the future.
This month, it is expected that the Gambling Commission will lay out a new strategy which is set to discuss huge penalties for those who are caught breaking the rules of the Gambling Commission. Repeat breaches of regulations may lead to top bookmakers and casinos losing their licence completely.
In the past, the Gambling Commission would talk to firms that break the rules and ask them to pay a settlement figure. This was very much a ‘blanket approach’ to dealing with things. However, Sarah Harrison, chief executive of the Gambling Commission, stated that the organisation is going to start using the wide powers the government has given it. The states that sanctions will include higher penalties for those who regularly fail gamblers.
Harrison took the reins at the Gambling Commission back in 2015. Since then, she has constantly made it known that she is going to be a bit stricter when it comes to dealing with firms that operate under their licences. This is the first indication that she is making good on her word, and it is likely to really shake up the industry.
One of the bigger complaints with the Gambling Commission is that there is no real guidelines as to the sort of penalties that a firm may be subject to should they breach the regulations. This has resulted in some very different penalties between firms, many of which have been negotiated after months. This begs the question; should bookmakers and casinos really can negotiate the penalties that they are subject to? Recent ‘penalties’ include:
- £280,000 paid by Paddy Power. We discussed this one right at the start. This was the result of senior staff members telling their junior staff members that they had to do more to get a known problem gambler back through their doors. This guy was spending hundreds of pounds a day on the ‘Fixed Odds’ machines.
- £800,000 paid by BetFred when they demonstrated that they did not have proper anti-money laundering protection in place. They were known to have accepted stolen cash from one of their VIP customers.
- £880,000 paid by Coral, who were guilty of the same thing. However, in this case, a problem gambler was constantly using the proceeds he received from crime to fuel his habit. As a result, it was not a case of traditional ‘money laundering’.
One of Harrison’s goals is to reduce the amount of time it takes for a settlement to be made be made. Harrison is aiming to offer incentives for settling early. So, the longer a firm decides to drag out the settlement process, the more they are going to need to pay.
Labour MP Carolyn Harris, a person who has really targeted the industry in recent months, has applauded the decision to have tighter penalties for bookmakers and casinos which breach their duty to their clients. However, she feels that they are not doing enough. She states that there also needs to be action taken against Fixed-Odds betting terminals. Gamblers can lose up to £100 per 20-seconds on these:
“I welcome this action from the Gambling Commission, but I implore the commission and the government to take immediate action to properly address the harm being done in communities across the country by the high stakes being waged on fixed odds betting terminals. Only by substantially reducing the maximum stake will we stop the harm being caused by these machines which have been called the ‘crack cocaine’ of gambling.”
Of course, this is going to have a major impact on the online gambling industry too. More and more people are looking to gamble and play casino games online and are veering away from traditional bookmakers and smaller casinos. How online casinos aim to tackle this growing epidemic is anybody’s guess.