Betfred Slapped With £825,000 Fine After Fresh AML Breaches

Betfred has been hit with an £825,000 fine over new Anti-Money Laundering (AML) failures and social responsibility breaches uncovered by the Gambling Commission. The investigation discovered that AML policies and safer gambling procedures were not adhered to in Betfred’s retail betting shops.

The Gambling Commission took a dim view of this, cautioning Betfred. In addition, the company will now have to undergo a third-party audit to ensure it fulfils AML and social responsibility criteria moving forward.

What did the investigation show?

Owned by the Done brothers, Betfred, which is one of the most revered UK betting sites, fell short across several key areas. Among the AML shortcomings identified were as follows:

• The licensee was unable to effectively manage money laundering risks associated with customers using its B3 gaming machines.
• Despite using machine alerts and daily reports, Betfred didn’t properly assess customer spend and the associated money laundering and terrorist financing risks.
• Betfred did not have a suitable policy in place to identify and handle customers who may be subject to financial sanctions.
• The thresholds regarding customers’ source of income were not appropriately risk based, with thresholds set at £15,000 in losses and £125,000 in stakes within 365 days.

There were also several social responsibility breaches detailed by the Gambling Commission. Among the violations found were:

• Betfred was unable to sufficiently identify spending and any associated financial risk factors related to problem gambling for customers using B3 gaming machines.
• Customer interactions did not always take place following the identification of risk factors. Interactions didn’t help minimise the risk of gambling-related harm.
• The quality of the interactions, particularly understanding the impact of them, didn’t meet industry standards.

Betfred in the spotlight once again

The Gambling Commission have been trying to stamp out AML breaches across the industry, and last month, Unibet operator Platinum Gaming were fined £10 million. As far as Betfred is concerned, this is the second time they have been penalised by the Gambling Commission for AML and social responsibility failures.

Previously, Betfred came under the microscope in 2023 for not having effective AML and social responsibility procedures in place. At the time, Betfred agreed to a £3.25 million settlement.

Bad timing

Given the news delivered by the Chancellor in last week’s budget, the timing of Betfred’s penalty was rather inopportune. Although general betting duty paid on sports betting will remain the same (15%) at land-based venues, Remote Gaming Duty (RGD) on online casino betting soared from 21% to 40%.

Before the budget was announced, Betfred had been considering pulling down all of its 1,287 betting shops across the UK. There was also a threat that approximately 7,500 jobs could disappear.

Gambling Commission response

While the Gambling Commission tried to strike a conciliatory tone in terms of explaining the breaches, they branded Betfred’s failures as ‘unacceptable’. John Pierce, Commission Director of Enforcement, outlined the gravity of Betfred’s offences and discussed the importance of a third-party audit.

He said:

“While the failings identified during the 2024 Compliance Assessment were predominantly technical breaches rather than arising from specific customer examples, they were nevertheless unacceptable, particularly with thresholds appearing too high and insufficiently risk based when assessed in practice, and deficiencies in some procedures adopted by the Licensee.

“We fully acknowledge the improvements the operator has already made since these issues were identified, and the independent audit will be key to confirming those changes are sustained so that the operator continues to be fully compliant with social responsibility and anti-money laundering requirements.”