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Gib-registered gambling company fined £2.87m over social responsibility and anti-money laundering failings

Petfre (Gibraltar) Limited will pay a £2.87m penalty for social responsibility and anti-money laundering failures following an investigation by the UK Gambling Commission.

The company – which runs and – will also receive an official warning, the Commission said in a statement on Wednesday.

“This is a further example of us taking action to investigate and sanction alarming failures,” said Leanne Oxley, Gambling Commission Director of Enforcement and Intelligence.

“We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.”

“Where standards do not improve, tougher enforcement will follow.”

The investigation by the UK Gambling Commission identified a number of failings at the business during the period October 2019 to December 2020.

It found there were no controls in place to prevent large levels of high velocity spending by new customers.

One customer was allowed to lose £70,000 over a 10-hour period just a day after opening the account, the Commission said.

The investigation also found that triggers for safer gambling interaction were too high and when customers’ spending increased considerably, which can be an indicator of harm, no further safer gambling account review was conducted in a timely manner.

One customer was first interacted with when they had deposited £20,700 and lost £10,200, but the next interaction did not occur until four months later when the customer had deposited £323,715 and lost £69,371.

The investigation also identified anti-money laundering failures including not fully taking into account the money laundering and terrorist financing [MLTF] risks connected to the business, in particular risks connected to country or geographic area, customers, transactions, and product and services.

It also found the company did not have appropriate policies, procedures and controls in place to manage and mitigate the MLTF risks, including thresholds that were inadequate, having insufficient information on customers and no evidence of ongoing monitoring prior to initial financial triggers being reached.

According to the UK Gambling Commission’s statement, Petfre did not ensure that its policies, procedures and controls were implemented effectively, including not following guidance issued by the Commission and not taking into account any applicable learning or guidelines.

Lastly, the Commission said the company failed to thoroughly implement the measures described in Money Laundering Regulations, including failing to identify the MLTF risks to which the business was subject and failing to establish and maintain policies, procedures and controls to manage and mitigate the risks effectively.

“The operator also provided inadequate employee training, failed to scrutinise transactions to ensure that that they were consistent with their knowledge of the customer and their risk profile, and failed to conduct sufficient anti-money laundering, customer due diligence and source of funds checks,” the Commission said.

The UK Gambling Commission, which licenses companies that operate in the UK market, said Petfre had cooperated throughout the investigation and took immediate corrective steps to address the identified failings.

Additionally, the Commission’s review of the specific customers identified during the compliance assessment found no evidence of criminal money.

“We will work with the UK Gambling Commission and continually review all our Anti-Money Laundering and Social Responsibility policies,” a spokesperson for Betfred told the Chronicle.

“During our assessment, the Commission found no evidence of criminal activity.”

“We remain committed to providing a safer gambling environment for our customers.”

The Gibraltar Government's Gambling Division said it had been working with Betfred on the issues raised by the investigation ahead of the announcement on Wednesday.

“The Gibraltar Gambling Division have been engaged with Betfred on this issue before the public release of the details of the UK regulatory settlement," Andrew Lyman, Gibraltar's Gambling Commissioner, told the Chronicle.

"We are reviewing the individual cases that are subject to this UK settlement which have been judged by the UK Gambling Commission against their codes of practice and their specific interpretations of those codes."

"We note that the UK Commission’s review of the specific customers identified during the compliance assessment found no evidence of criminal spend with the licensee."

"We also note the cases do not reflect current practice."

"We have had regulatory engagement with this operator since the time of the UK review and have observed continuous improvement in anti-money laundering and terrorist financing controls."

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