Betting operators given warning they face higher penalties
Betting operators have been given a stark warning they can expect harsher financial penalties from the Gambling Commission in future if they fail to meet the regulator's standards.
A number of gambling operators, including Betfred, Gala Coral and Paddy Power, have had to pay around £3.75 million in penalty packages since last year for failures in areas such as anti-money laundering and social responsibility policies.
However, the commission's chief executive Sarah Harrison said the regulator intended to end such "regulatory settlements" being their default position.
Speaking at the commission's first Raising Standards conference in Birmingham, Harrison said: "One of the principles in the commission’s existing statement for licensing and regulation is a preference for pursuing compliance through means that stop short of a licence review, in favour of a regulatory settlement. We propose to remove this bias in favour of settlement.
'On an equal footing'
"We'll put access to all tools, including licence review – both of the operator and personal management licences – on an equal footing. Put simply, we'll use the right tool for the job."
Operators were told future failures could result in harsher penalties.
Harrison continued: "In addition, we'll propose changes to our statement on financial penalties with the likelihood of higher penalties going forward, in particular where we see systemic and repeated failings.
"Our principles on penalties already reflect the need to remove profits from non-compliance, take account of costs and consumer harm, and deter poor compliance, but higher penalties are likely if we do not see behaviour changing."
Harrison is no stranger to imposing heavy penalties as a regulator. When she was senior partner in charge of enforcement at energy regulator Ofgem in 2014, six energy companies were fined a total of nearly £55m for failing to meet their obligations.
Harrison said that while progress had been made in areas including the development and implementation of harm-reduction strategies there was still more to be done, and she challenged the industry to become "the most trusted gambling operators in the world".
The commission, in conjunction with the Competition and Markets Authority, has also recently begun an investigation into online gambling operators, demanding information from them about their use of potentially unfair terms and conditions and misleading practices.
'Raise your ambitions'
She told operators: "You need to raise your ambitions and your sights higher.
"You need to step up the pace of change – in how you handle customer complaints; ensure advertising is clear; simplify terms and conditions; develop your risk management strategies on money laundering; evaluate the impact of social responsibility initiatives –and, working across all these areas, in how you do more to share best practice."
She added: "Don’t wait for a crisis to happen that shakes the very foundation of customers’ trust in your industry. Act now and demonstrate to consumers your interest in their needs is genuine."
Harrison said customers being treated fairly was becoming an increasingly important issue for the regulator, who had experienced an increase of more than 300 per cent in emails and calls from the public in the last two years.
She also revealed the commission would by the end of the financial year begin a review of alternative dispute resolution (ADR) providers in the gambling industry, which would include the Independent Betting Arbitration Service (Ibas).
That work would also include a review of operators' current practices and requirements in handling customer complaints.