William Hill fined £6.2m for breaching social responsibility regulations

William Hill have been fined £6.2 million by the Gambling Commission for breaching anti-money laundering and social responsibility regulations, the second largest penalty handed out by the regulator.

According to the commission a "systemic senior management failure" meant there was not adequate staffing or systems in place to respond to repeated alerts about suspicious behaviour.

Ten incidents were identified in which the high street giant made money from customers who may have been using the proceeds of crime to gamble.

Those occasions – between November 2014 and June 2017 – were regarded as probably "not unique" by the commission.

A total of £3.4m was deposited by the ten identified customers, with William Hill netting a £1.2m profit. This included one customer who was funding a gambling problem by stealing from his employer and another who had defrauded elderly victims.

That £1.2m will be reimbursed to victims, with William Hill agreeing to pay £5m to charitable causes.

Gambling Commission executive director Tim Miller

'Swift and robust regulation'

Gambling Commission executive director Tim Miller told BBC Breakfast: "William Hill weren't putting sufficient resources in place to meet the really important obligations they have to keep crime out of gambling and to protect vulnerable people.

"Today's decision shows that where they don't take these responsibilities seriously they can face swift and robust regulation."

When asked if similar penalties could be meted out in the future, Miller added: "I think sadly this isn't going to be the last time that we'll be using our powers in this way."

'Systemic failing'

The commission said William Hill allowed one customer to deposit £541,000 over 14 months after staff made the assumption that his potential income could be £365,000 a year based on a verbal conversation and without further questioning.

The man was in fact earning around £30,000 a year and was funding his gambling habit by stealing from his employer.

William Hill's penalty is the second largest handed out by the commission. Last year online firm 888 were hit with a fine of £7.8 million for "serious failings" in the safeguarding of their customers.

Gambling Commission executive director Neil McArthur said it would use the full range of their enforcement powers "to make gambling fairer and safer".

He added: "This was a systemic failing at William Hill which went on for nearly two years and today’s penalty package – which could exceed £6.2m – reflects the seriousness of the breaches.

"Gambling businesses have a responsibility to ensure that they keep crime out of gambling and tackle problem gambling – and as part of that they must be constantly curious about where the money they are taking is coming from."

Hills response

William Hill will now appoint external auditors to review their anti-money laundering and social responsibility policies and procedures and then share the findings with the wider industry.

Responding to the fine, William Hill chief executive Philip Bowcock said in a statement: "William Hill has fully co-operated with the commission throughout this process, introducing new and improved policies and increased levels of resourcing.

"We have also committed to an independent process review and will work to implement any recommendations that emerge from that review. We are fully committed to operating a sustainable business that properly identifies risk and better protects customers.

"We will continue to assist the commission and work with other operators to improve practices in the areas identified."

William Hill's share price ended the day up 4.6p at 328.5p.

Examples of where William Hill failed

Excerpts from the Gambling Commission's report

A customer was allowed to deposit £654,000 over nine months without source of funds checks being carried out. The customer lived in rented accommodation and was employed within the accounts department of a business earning around £30,000 per annum.

A customer was allowed to deposit £541,000 over 14 months after the operator made the assumption the customer’s potential income could be £365,000 per annum based on a verbal conversation and without further probing. The reality was that the customer was earning around £30,000 a year and was funding his gambling habit by stealing from his employer.

A customer who was allowed to deposit £653,000 in an 18-month period activated a financial alert at William Hill. The alert resulted in a grading of ‘amber risk’ which required, in accordance with the licensee’s anti-money laundering policy, a customer profile to be reviewed. The file was marked as passed to managers for review but this did not occur due to a systems failure. The customer was able to continue gambling for a further six months despite continuing to activate financial alerts.

A customer was identified by William Hill as having an escalating gambling spend with deposit levels exceeding £100,000. The company interacted with the customer seeking assurance that the customer was ‘comfortable with their level of spend’. After receiving verbal assurance and without investigating the wider circumstances the operator continued to allow the customer to gamble. In our [Gambling Commission] view that interaction was inadequate and did not review the customer’s behaviour sufficiently to identify if their behaviour was indicative of problem gambling.

A customer exceeded deposits of £147,000 in an 18-month period with an escalating spend and losses of £112,000. William Hill systems identified the issue but its only response over a 12-month period was to send two automated social responsibility emails. Our view is that this action alone was not sufficient given the customer’s gambling behaviour coupled with the severity of the losses.

HOW DOES WILLIAM HILL'S PUNISHMENT COMPARE?

Previous Gambling Commission penalties

888£7.8 million

William Hill £6.2m

Camelot £3m

Ladbrokes Coral £2.3m

Gala-Coral £846,000

Betfred £800,000

GVC Holdings £350,000

BGO £300,000

Paddy Power £280,000

Futgalaxy £265,000

Stan James Online £80,000

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