By Geoff Percival
Paddy Power-Betfair shares rose by over 5% despite it being effectively fined £2.2m (€2.5m) by the UK’s gambling watchdog for failing to guard against money laundering activity.
Britain’s Gambling Commission ordered the payment after finding the Dublin-headquartered betting and gaming group failed to stop stolen money being gambled. It also said Paddy Power-Betfair failed to protect and “adequately interact with” customers who showed signs of gambling addiction.
The instances covered activity across the company’s online, retail and betting exchange outlets. The money-laundering element related to a customer betting with funds stolen from his employer, an unnamed charity. Additionally, five customers were able to gamble “extensively” despite showing signs of problem gambling.
“As a result of Paddy Power-Betfair’s failings, significant amounts of stolen money flowed through their exchange and this is simply not acceptable. Operators have a duty to all of their customers to seek to prevent the proceeds of crime from being used in gambling,” said Richard Watson, the Gambling Commission’s executive director.
“These failings stem from one simple principle — operators must know their customer. If they know their customer and ask the right questions then they place themselves in a strong position to meet their anti-money laundering and social responsibility obligations.”
Paddy Power-Betfair said it will return £500,000 to the impacted parties and will make a £1.7m payment to betting addiction charity GambleAware.
Paddy Power-Betfair CEO Peter Jackson acknowledged the failings and said the company has invested in strengthening its systems around responsible gambling and customer protection.
“This work is continuous and we are committed to working in partnership with other operators, and with the Commission, to become better and better at protecting customers,” he said.
“We have a responsibility to intervene when our customers show signs of problem gambling. In these five cases our interventions were not effective and we are very sorry that this occurred.”