They’re off! William Hill’s money laundering safeguards

Comment Martin Flanagan

Bookmaker William Hill needed its £6.2 million fine by the Gambling Comission like six short-priced favourites all coming in at Ayr racecourse.

It is a public relations black eye, even if financially relatively insignificant as evidenced by the complete lack of impact on the group’s share price yesterday. The Gambling Commission did not mince words, saying the fine was for the “systemic” breaching of anti-money laundering and social responsibility regulations at William Hill.

The industry regulator makes explicit that this was not the work of rogue staff or individual incompetence at William Hill, but a product of a lax culture towards money laundering and problem gambling generally at the company.

Seemingly cavalier failures in William Hill’s checks meant that ten customers deposited large sums linked to criminal offences, which resulted in gains for the business of about £1.2m.

The failures also went on for nearly two years, said the commission, as Britain’s second largest bookmaker was presumably credulous or perfunctory in seeking information about the source of the shady customers’ funds or whether there was a problem gambler on the other side of the grill.

Senior management are said to have failed to mitigate the risks, partly through not employing sufficient staff to ensure that processes for adhering to regulations were effective.

For an industry player as big as William Hill, it is very sloppy. If an operator of its size and supposed financial sophistication cannot ringfence itself from criminals and tackle problem gambling, what price its smaller, less well-upholstered rivals.

Examples of failure included one punter being able to deposit comfortably more than half a billion pounds with William Hill over nine months without any checks being run. The customer was living in rented accommodation and earning £30,000 a year.

Embarrassingly, but rightly, the Gambling Commission has insisted William Hill appoint external auditors to review the implementation and effectiveness of its anti-money laundering and social policies, and share the findings with the wider industry.

The silver lining in the whole affair.