Done Bros Fined £3.25m for Safety Failures

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Done Bros (Cash Betting) Limited, the company which holds the licence for Betfred's retail betting operations, will pay a £3.25 million regulatory settlement following a UK Gambling Commission (UKGC) investigation. The penalty addresses significant failures in the company's anti-money laundering (AML) and safer gambling (SG) procedures between January 2021 and December 2022.

The settlement, announced on 18 July 2023, includes a divestment of £1,052,717 and will be directed towards socially responsible purposes. The UKGC review identified systemic weaknesses that left the business vulnerable to money laundering and failed to protect customers from gambling-related harm.

Anti-Money Laundering Failures

The Commission's investigation found that Done Bros breached Licence Condition 12.1.1, which relates to the prevention of money laundering and terrorist financing. The operator's own risk assessment was deemed insufficient as it did not fully consider the UKGC's official guidance or account for all business risks, such as those from third-party payment processors or customers using pre-paid cards.

Specific failings included:

• High Financial Triggers: Financial alert thresholds were set too high, meaning risky patterns of play were not flagged for review.
• Inadequate Checks: The company failed to consistently obtain Know Your Customer (KYC) identification and Source of Funds (SoF) information when thresholds were met. In one case, a customer staked £250,000 before an ID request was made after an unexplained 10-day delay.
• Poor Record Keeping: Weaknesses in maintaining policies and procedures were identified, alongside an inability to track customer activity across different betting shops and products.
• Uncorroborated Information: The operator placed undue reliance on open-source information to verify customers' funds without further corroboration. This led to several customers staking large sums without appropriate checks:
  • Customer A lost approximately £61,000 in four months with no action taken, as a previous check had concluded there were 'no AML concerns' based on an ID document alone.
  • Customer C staked and lost £72,000 over nine months.
  • Customer D staked £429,222 and lost £120,353 in eleven months.

Safer Gambling Breaches

Done Bros also failed to comply with Social Responsibility Code Provision (SRCP) 3.4.1, which requires operators to interact with customers to minimise the risk of gambling harm.

The investigation uncovered several deficiencies:

• Lack of Protection for New Customers: Controls were insufficient to protect new customers or monitor high-velocity spending, exposing them to the risk of substantial losses without intervention.
• False Assumptions: The operator wrongly assumed that customers who were winning were not at risk of harm. Customer E, believed to be a professional poker player, was allowed to stake £517,499 in two months—close to their entire net worth based on the company's own checks—without any safer gambling interaction because they were in a winning position of £8,585.
• Ineffective Interactions: When interactions did occur, they were often not conducted early enough or were ineffective. Customer F deposited £337,029 over five months and was interacted with 12 times. Despite showing signs of potential harm, such as a declined card, the interactions did not escalate because the customer appeared 'happy' to continue gambling.
• Poor Evaluation: There was a lack of evidence showing that the effectiveness of customer interactions was evaluated, limiting the ability to conduct meaningful future interventions.

The Regulatory Settlement

The £3.25 million payment is in lieu of a formal financial penalty. In reaching the settlement, the UKGC considered several aggravating factors, including the serious nature of the breaches and the fact that senior management should have been aware of the governance issues.

However, the Commission also noted mitigating factors, such as the operator's implementation of an early action plan to remedy its failings and its full cooperation with the investigation. Done Bros also agreed to pay the Commission's costs for conducting the review.