Entain Hit with £17 Million Fine – What You Need to Know

Posted by Harry Kane on Friday, March 25, 2022

Ever since the UK Gambling Commission (UKGC) prioritised the safeguarding of vulnerable gamblers as its core strategic objective in 2018, we’ve seen a number of huge fines laid against numerous iGaming operators. Such financial sanctions are usually imposed due to a direct failure to protect or identify vulnerable players, while gambling brands may also come under scrutiny for not adhering to anti-money laundering regulations.

The Entain Group is one of the latest entities to be hit with such a fine, paying out a record of £17 million for social responsibility and anti-money laundering failures. We’ll explore this below, while asking what it means for the market as a whole.

Why Have Entain Been Fined?

The Entain group is one of the largest iGaming brands in Britain, with its online business handle LC International Limited running 13 casino and sports betting platforms including Coral.co.uk, Foxybingo.com and the iconic Ladbrokes.com. It also operates the Ladbrokes Betting & Gaming Limited operation that runs some 2,746-gambling premises across the length and breadth of the UK, and each of these entities has been cited as part of the recent financial sanction.

More specifically, Entain will pay a total of £14 million for failures at numerous LC International Limited-owned sites, while forking out a further £3 million for issues pertaining to the popular Ladbrokes Betting & Gaming Limited operation. The £17 million payment will be directed towards socially responsible projects as part of a much wider regulatory settlement, while additional licensing conditions will also be added to ensure that a business improvement plan is implemented and overseen by a senior Entain board member.

Similarly, Entain have been compelled to agree to a third-party audit within the next 12 months, to ensure that the brand is complying with the regulatory License Conditions and Codes of Practice going forward. Some of the accusations levied against the Entain brand are significant, with Gambling Commission Chief Executive Andrew Rhodes suggesting that their investigation “revealed serious failures that have resulted in the largest enforcement outcome to date”.

He went onto say that “there were completely unacceptable anti-money laundering and safer gambling failures”, before reaffirming that “operators are reminded they must never place commercial considerations over compliance”. The latter point is striking, as it gets to the very heart of safeguarding in the iGaming industry and suggests that more needs to be done in this respect going forward.

What do ‘Social Responsibility’ and ‘Anti-Money Laundering’ Failures Typically Include?

Of course, the terms ‘social responsibility’ and ‘anti-money laundering’ remain quite vague despite being widely used in the iGaming marketplace, so what do they mean in practical terms? Well, social responsibility failures primarily refer to instances in which iGaming brands are slow to interact with customers who are demonstrating questionable behaviours or directly at risk of gambling-related harm.

In this case, for example, Entain were charged with conducting just a single interaction and chat with one online customer who spent extended periods gambling and deposited an incredible £230,845 in a period of 18 months. The investigation also found that a Coral.co.uk one customer was eventually blocked after spending £60,000 in 12 months and failing to provide a proof or source of funds (SOF).

Despite this, they subsequently opened a new account at Ladbrokes and deposited £30,000 less than 24 hours after being blocked, and this is the direct responsibility of the parent company. In another case, one brick-and-mortar betting shop customer wasn’t escalated for a ‘safer gambling review’ by either the shop or its support team despite staking £29,372 and losing £11,345 of this haul in a single, four-week period.

As for anti-money laundering failures, these include the failure to conduct an adequate risk assessment or identify the actual risk facing their online business and individual casino websites. Once again, the failure to carry out adequate SOF checks on high-rolling customers (including one who deposited an incredible £742,000 in 14 months in this instance) is also a direct example of an anti-money laundering regulatory breach.

Another was allowed to deposit £186,000 in just six months due to the same inherent failings. Failures also include the failure to conduct enhanced customer ‘due diligence’ checks in the requisite period of time, which enables one customer to deposit some £524,501 in the nine months from December 2019 through October 2020.

Ultimately, the wider issue here is Entain’s apparent lack of scrutiny or monitoring of high-rollers or big-stake customers. This is central to safeguarding and complying with UKGC regulatory measures, as it helps operators to identify problem gambling behaviour and potentially intervene before their spending or compulsion spirals out of control.

Further details of this particular case can be found online, but it will undoubtedly come as a significant shock to the marketplace and raise significant concerns about whether even the leading iGaming brands are complying with safeguarding measures.

The Last Word

The most recent are even more shocking given Entain’s previous failings, with this being the second time that the parent company or one of its brands have fallen foul of their social responsibility or anti-money laundering obligations. The question that remains is whether the social responsibility and anti-money laundering regulations in place still carry weight, while it’s also unclear whether even hefty financial sanctions are as effective as they once were.

After all, there’s an incredible amount of money washing around the iGaming market in the UK, which is worth around $5.9 billion in total. So, it can be argued that brands are willing to risk potential fines in the pursuit of higher commercial gains, suggesting that alternative sanctions may be required going forward.

However, a more general observation may be that some iGaming brands have simply become complacent when meeting their safeguarding obligations, especially larger entities that boast a large number of casino platforms and cater to a huge audience. In this respect, the fine for Entain reminds others of their responsibilities in the iGaming space, and could well provide a stark warning for other brands throughout the UK.