Hillside (UK Sports) to Pay £239k for Safety Failures

Article Content

Hillside (UK Sports) Reaches £239,085 Settlement with UKGC

Hillside (UK Sports) ENC, the company holding the UK licence for major online operator bet365, will pay a £239,085 regulatory settlement following an investigation by the Gambling Commission (UKGC). The ruling, announced on 4 April 2024, addresses failures in the company's anti-money laundering (AML) and social responsibility processes.

The investigation, which stemmed from a compliance assessment in March 2022, found breaches of the operator's licence conditions between May 2021 and September 2022. In addition to the settlement payment, which will be directed to socially responsible causes, Hillside will also pay £15,684.50 towards the Commission's investigation costs.

Details of the Breaches

The UKGC's review identified specific failings in two key areas of consumer protection.

Anti-Money Laundering (AML) Failings

Between May 2021 and July 2022, Hillside was found to be in breach of Licence Condition 12.1.1, which requires operators to have effective policies and controls to prevent money laundering and terrorist financing. The Commission noted several issues:

• Ineffective Triggers: The operator's 'know your customer' (KYC) triggers were not effective at managing money laundering risks.
• Sanctions Checks: The company failed to conduct financial sanctions checks on new customers before they made their first deposit.
• Over-reliance on Self-Verification: The operator relied too heavily on customers' annual self-verification of their identity documents rather than performing its own independent checks.
• Vague Risk Profiling: Internal procedure documents lacked adequate detail on how customers were classified as "at risk" or "not at risk."

The Commission's review of the customer accounts in question found no evidence of criminal spending or that the operator had accepted funds from individuals subject to financial sanctions.

Social Responsibility Failings

Between October 2021 and September 2022, the operator also failed to comply with Social Responsibility Code Provision (SRCP) 3.4.1, which governs customer interaction.

The UKGC found that Hillside's approach to safer gambling interventions was lacking:

• Generic Interactions: Customer interactions were often not tailored to the individual's specific circumstances or level of potential harm, making them less meaningful.
• Ineffective Evaluation: The operator's Early Risk Detection System was not demonstrably effective at understanding the impact of an interaction on a customer's behaviour.
• Poor Follow-up: The company could not effectively determine whether a customer had read or understood the advice provided during an interaction.

Background and Regulatory Context

Hillside (UK Sports) ENC is the licensed entity for bet365, one of the UK's largest and most well-known gambling operators. The regulatory action followed a standard compliance assessment that triggered a more in-depth review.

The Commission noted several aggravating factors in its decision, including the fact that the breaches were similar to issues raised in previous public statements to the wider industry. However, it also acknowledged mitigating factors, such as the operator's timely co-operation and the remedial steps it has since taken.

Implications for Consumers

This regulatory settlement highlights the standards the UKGC expects all licensed operators to uphold. For consumers, it serves as a reminder of the protections that should be in place when they gamble online.

The Commission used the announcement to remind all operators of their duties, including the need to:

• Conduct financial sanctions checks before a customer's first deposit.
• Implement formal processes to measure the effectiveness of safer gambling interactions.
• Ensure customer risk profiles are properly informed by the company's own AML risk assessment.
• Keep detailed records of all customer interactions and the reasoning behind decisions.

By agreeing to a regulatory settlement rather than facing a formal financial penalty, Hillside (UK Sports) ENC has acknowledged these failings and agreed to the UKGC's statement of facts.