888 UK Limited, a subsidiary of 888 Holdings plc, ("888") and one of Britain's biggest online gambling firms, has agreed to pay a record £7.8 million in a regulatory settlement reached with the Gambling Commission, following a review of its licence.
The public statement issued by the Commission identifies breaches of the Licence Conditions and Codes of Practice (LCCP) relating to customer self-exclusion and customer interaction.
888 voluntarily notified the Commission in February 2017 of a technical failure in its systems, which failed to prevent customers who had self-excluded from its casino, poker and sports platform from accessing bingo on a separate platform operated by 888.
Over 7,000 customers who should have been excluded deposited a further £3.5 million. The amount staked by these customers during this period exceeded £50 million. Taking into account the number of customers involved, the duration of the breach and the scale of the gambling, the Commission concluded that this amounted to a serious breach of LCCP SR Code provision 22.214.171.124.
The public statement identifies a failure to comply with SR Code 126.96.36.199(a), which requires licensees to have in place systems to ensure that customers who hold more than one account with a licensee and who self-exclude, are excluded from all gambling with that licensee, unless they make clear that they wish only to be excluded from part.
The public statement also highlights an investigation into 888's failure to recognise problem gambling behaviour in a particular customer who, over a 13 month period (gambling 3 to 4 hours per day) staked £1.3 million, including £55,000 stolen from an employer.
The Commission identified a breach of LCCP SR Code provision 188.8.131.52(e)(i), which requires licensees to have effective policies and procedures in place for customer interaction with customers whose behaviour may indicate problem gambling, including (under (e)(i)) specific provision to use relevant sources of information to ensure effective decision-making in respect of customer interaction, including to identify at risk customers who may not display obvious signs of problem gambling, for example by reference to indicators such as time or money spent.
The financial element of the regulatory settlement includes returning £3.5 million to those customers who should have been excluded but were not (returning those customers to the position they would have been in but for the failure), compensation to the employer of £62,000 - reflecting 888's net financial gain resulting from that failing - and a payment in lieu of a financial penalty of £4.25 million. This payment is made up of £4 million in respect of the self-exclusion breach and £250,000 in respect of the customer interaction breach.
888 also agreed to undertake an external audit on terms to be agreed with the Commission of its self-exclusion processes.
Whilst the scale of the breach in relation to self-exclusion was significant - 888 is one of the largest operators in the UK market - this case nevertheless is remarkable for the scale of the financial payment, and is a very clear indication (if one were needed) of the Commission's determination to safeguard consumers.
The public statement, which acknowledges 888's frank and cooperative approach throughout, can be read here. It is important reading for other operators, in particular other UK licensees.
Mishcon de Reya's Betting and Gaming team has significant experience in dealing with regulatory and other investigations, and also in undertaking external independent audits of the type required in this case. If you require any advice please get in touch with a member of our team.