Bookmakers warned over protecting gamblers after record fine for 888

Protecting consumers from harm is "not optional", gambling operators have been warned, after online firm 888 were hit with a record penalty of £7.8 million by the Gambling Commission for "serious failings" in the safeguarding of their customers.

The punishment dwarfs previous penalties enforced on gambling operators, which have totalled nearly £5.5m over the last two years.

Charity GambleAware said the action gave a "clear message" to the gambling industry to do more to protect people from harm.

The Gambling Commission said it had found "serious flaws" in 888's social responsibility measures, including the failure to take action when one customer staked more than £1.3m over a 13-month period, including £55,000 stolen from their employer.

The customer, who was subsequently sentenced to 16 months in prison for theft and false accounting, spent more than three hours a day gambling for 15 months.

The commission said: "Our investigation found no evidence that 888 engaged with the customer to ascertain if they had any problem gambling issues or to confirm their source of income."

In February, 888 informed the commission that a technical failure also meant more than 7,000 customers who had chosen to self-exclude were still able to access the operator's bingo platform and could continue to gamble having deposited £3.5m into their accounts.

HOW DOES 888 PUNISHMENT COMPARE?
Previous Gambling Commission penalties

Camelot £3 million
Gala-Coral £846,000
Betfred £800,000
BGO £300,000
Paddy Power £280,000
Futgalaxy £265,000

The regulator's chief executive Sarah Harrison said: "Safeguarding consumers is not optional. This penalty package of just under £8m reflects the seriousness of 888’s failings to protect vulnerable customers.

"The 888 sanction package will ensure those affected don’t lose out, that the operator pays the price for its failings via a sum that will go to tackling gambling-related harm, and that independent assurance will be given to see that lessons are learnt."

Speaking to the BBC, Harrison added: "Our requirements are that every company must provide the facility for every customer to be able to bar themselves from gambling. These 7,000 looked to do that. But 888 didn't deliver it as effectively as they should have done.

"There are around two million people now in Britain who either are problem gamblers or are at risk of problem gambling.

"Companies are beginning to put different practices in place to identify people right up front, but more needs to be done. We need to go further and we need to go faster."

Of the penalty package, £3.5m is repayment of deposits made by the self-excluded customers and compensation of £62,000 to the employer from whom money was stolen.

A further £4.25m will be paid to a socially responsible cause to invest in measures to tackle gambling-related harm.

The commission has also ordered an independent audit of 888’s processes relating to customer protection.

In response, 888 said in a statement: "The company has been working cooperatively with the Gambling Commission throughout its review and has concluded a voluntary regulatory settlement with the Gambling Commission.

"The company accepts the conclusion of the review and is committed to providing players with a responsible as well as enjoyable gaming experience."

GambleAware this week published research showing online operators held data that could be used to intervene swiftly to help those at risk of gambling problems.

Chief executive Marc Etches said: "The fine issued by the Gambling Commission sends a clear message to the industry that they need to do more to protect people from harm online.

"Gambling is often dubbed the ‘hidden addiction’ as it can be hard to spot. However, GambleAware research has shown that online operators actually have the ability to spot problem gamblers as they play. We must now make sure the industry uses this information to protect people who are at risk."

Warwick Bartlett, chief executive and founder of the Global Betting & Gaming Consultancy, said the news was an important landmark for the sector.

"This is a step change for the industry with the Gambling Commission drawing a deep line in the sand that tells the industry adherence to preventing pathological play is of the utmost importance," he said.

"I think operators will now be reviewing their compliance processes to ensure that they meet the commission's expectations."

Warwick Bartlett: a step change for the industry

The Remote Gambling Association said the news was a "stark reminder" to online operators of their obligations.

Chief executive Clive Hawkswood said: "The size of the financial penalties involved should leave no one in any doubt about the importance that we should attach to this settlement."

He added: "The wider industry remains committed to doing more and better with regard to the protection of customers and this case underlines why that must be a priority."

Despite the news, 888's share price was nearly 4.5 per cent higher at 264.25p on Thursday afternoon.

Click here for industry editor Bill Barber's view