Ladbrokes financial penalties in early 2023 or the importance of protecting vulnerable gamblers

Article by : SlotsUp Team Apr 3, 2023

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Updated: Apr 3, 2023

The Northern Territory Racing Commission (NTRC) has announced an AU$78.540 penalty to the Australian sport betting company Ladbrokes. Fines are quite reasonable: the gambling service hasn’t provided the proper control over the financial operations and failed at  preventing players’ addictive behavior. 

Such carelessness led to over AU$8 million in damage caused by the financial advisor Gavin Fineff who was trying to win back his debts using clients’ money and deceiving friends, and elder relatives. 

Ladbrokes’ operators didn’t make any effort to prevent the accident and even more – acted like a catalyst for millions of overspending. Thus, Ladbrokes’ security system didn’t work well and committed a number of gross violations of the responsible gambling policy. The NTRC found the financial adviser guilty of numerous fraud wagers and fined monetary penalties to the betting service of almost AU$ 80.000. The company broke essential license requirements: managers didn’t check the sources of Fineff’s stakes. Moreover, the operator offered bonuses of AU$528.890 encouraging a financial advisor to spend more cash on wagering the credit money back.

According to the NTRC research, it was found that the betting website verified the financial advisor’s personality when he created the account in the gambling platform using a nickname. By the moment he was suggested to accept almost half a million dollars bonus, the Ladbrokes operators already knew the client had huge losses at other bookmakers’ sites. Still, they haven’t made any actions to avoid even more harmful gameplay for their customer.

Alastair Shields, a criminal judge who investigated Gavin Fineff’s case, has made a conclusion that the sports betting website was more interested in generating significant revenue than in creating a healthy environment for gambling. Ladbrokes didn’t pay attention to the fact that deposits, which the financial consultant made, were much higher than his salary.

Regulators also found that Mr. Fineff hasn’t paid back the money he lost in advantage for the bookmaker. This figure amounted to AU$758.510.

Ladbrokes was criticized by the publicity for its low social responsibility and unwillingness to operate honestly, keeping moral values. The operator preferred to capitalize on a vulnerable client rather than stop his overspending and protect himself from bankruptcy. 

The last incident can greatly impact the website’s reputation and decrease traffic because bettors can’t feel safe and comfortable when a bookmaker doesn’t follow the path of  responsible gambling.

Still, the situation with a financial advisor is not unprecedented. The Gambling Commission obliged Entain Group, a parent of 13 betting operators, to pay £17 million (AU$30.971 million) for its failures in anti-money laundering and social responsibilities in the third quarter of 2022. Ladbrokes’ part from this penalty accounted for £3 million (AU$5.446 million).

The main social duty failures referred to the following issues:

• not communicating with customers to minimize their risks of potential losses and prevent the appearance of gambling addiction;
• allowing bettors to open several accounts on Entain Group bookmakers’ websites without checking their debt;
• not examining the clients’ sources of income.

As for anti-laundering failures Ladbrokes paid for:

• allowing clients to deposit significant amounts of money without checking their revenue and ability to pay the money back;
• inability to provide a qualitative risk assessment;
• using not reliable personal customers’ data from open-source platforms;
• accepting high wagers without gamblers’ profile verification and monitoring of their behavior.