Gambling Commission identifies "serious failings" at Paddy Power

Great Britain’s Gambling Commission (GC) has identified “serious failings” on the part of Paddy Power in relation to keeping crime out of gambling, with the bookmaker stumping up more than ?300,000 as a result.

In a report published this morning, the Commission identified one Paddy Power online customer who was later convicted of a serious criminal offence relating to fraud.

In September last year, the online customer pleaded guilty to fraud offences relating to the theft of more than ?250,000 from six customers at two banks where he worked.

The Commission said police confirmed Paddy Power had provided them with information that indicated the man had spent a significant amount on its sites during that time.

The operator said it had social responsibility and anti-money laundering policies and procedures in place, had trained staff and had systems for monitoring internal compliance.

In its report, however, the Commission said Paddy Power had failed to take “reasonable steps” to establish the customer’s source of funding.

The Commission asked Paddy Power to investigate the matter to determine whether the case demonstrated any failings in its system for keeping crime out of gambling.

Paddys confirmed the customer opened an account with them on 21 April 2014 and that his high level of spending triggered a need to undertake “enhanced due diligence” in September 2014.

This led to confirmation there was no negative open-source media coverage relating to the customer, but that he had previously bought a house valued at ?125,000.

The investigation also revealed that he was not listed on any sanctions registers, however Paddys admitted it made no direct enquiries to the customer about the source of his funds.

The operator said it deemed the customer to be ‘medium risk’ and recommended that further information be obtained, but this did not happen.

Paddy Power acknowledged it had failed to follow the policies and procedures it had in place for undertaking due diligence checks on customers for its online business.

In its report, the Commission also highlighted two customers at Paddy Power’s land-based betting shops who were laundering money through the bookmaker.

Paddy Power reached a voluntary settlement with the Commission, including agreeing to a third party review of its anti-money laundering controls.

The operator also agreed to amend its policies and procedures to address the shortcomings highlighted in the report, and to pay ?280,000 to an agreed socially responsible cause.

Paddys will also pay ?27,250 to the Commission to covers its costs in investigating the matter.

In conclusion, the GC said the case provides “valuable learning” for operators who should consider reviewing their legal obligations and to prevent money laundering and better protect customers.

A spokesman for Paddy Power Betfair said the historical failings in the report were “clearly unacceptable”.

“Paddy Power has since significantly strengthened its internal procedures and staff have been retrained to ensure these procedures are implemented effectively.

“Paddy Power Betfair takes its responsibilities extremely seriously and we have co-operated fully with the Gambling Commission at every stage of this process,” the spokesman added.