Systemic senior management failure to protect consumers and prevent money laundering will result in William Hill Group (WHG) paying a penalty package of at least £6.2m for violations of its online committments.
A UK Gambling Commission investigation revealed that between November 2014 and August 2016 the gambling business breached anti-money laundering and social responsibility regulations.
Senior management failed to mitigate risks and have sufficient numbers of staff to ensure their anti-money laundering and social responsibility processes were effective. This resulted in ten customers being allowed to deposit large sums of money linked to criminal offenses which resulted in gains for WHG of around £1.2 million. WHG did not adequately seek information about the source of their funds or establish whether they were problem gamblers.
WHG will pay more than £5m for breaching regulations and divest themselves of the £1.2 million they earned from transactions with the ten customers. Where victims of the ten customers are identified, they will be reimbursed. If further incidents of failures relating to this case emerge, WHG will divest any money made from these transactions.
WHG will also appoint external auditors to review the effectiveness and implementation of its anti-money-laundering and social responsibility policies and procedures and share learning with the wider industry.
Neil McArthur, Executive Director, said, “We will use the full range of our enforcement powers to make gambling fairer and safer. This was a systemic failing at William Hill that went on for nearly two years, and today’s penalty package, which could exceed £6.2 million, 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.”
William Hill CEO, Philip Bowcock, commented: “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.”
The Gambling Commission highlighted that as part of William Hill’s failings 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.
Another customer was allowed to deposit £541,000 over 14 months after the operator made the assumption that 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 WHG. 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.