Famed Irish sportsbook Paddy Power has agreed to a “voluntary settlement” with the United Kingdom Gambling Commission [UKGC] to resolve alleged lapses in oversight regarding the company’s monitoring and reporting of three different problem-gambling or money-laundering cases.
As a result of the settlement. Paddy Power will donate £280,000 to an agreed-upon “socially responsible cause,” which will prevent the company from receiving an official fine for the violations and lapses in judgment uncovered by the UKGC.
The £280,000 represents the profit the company is believed to have earned from the three customers at the focus of the UKGC’s investigation. Paddy will also pony up an additional £27,250 to the UKGC itself to cover the investigative expenses incurred by the regulatory and watchdog agency.
All of the incidents detailed in a recent statement issued by the UKGC focus on the same core problem, an alleged failure by Paddy Power executives to thoroughly investigate and take action in the various incidents involving Paddy customers who were observed engaging in suspect behaviour.
Two case reported involved:
- The well-publicized case of Mark Cooney, a bank employee in the city of Plymouth, a coastal hub in Devon in southwestern England. Cooney had defrauded various bank customers out of at least £250,000, and had spent a good share of that ill-gotten wealth on an online Paddy account.
The UKGC investigation found Paddy had lapsed in its efforts to determine the true nature of Cooney’s wealth, failing the basic KYC rules in place for UK-regulated books regarding high-volume customers.
- A woman seen repeatedly laundering Scottish bank notes by inserting them into betting terminals, then immediately cashing out pay tickets while doing little or no betting.
Paddy management had failed to complete a proper “suspicious activity” report on the client, referred to as “Customer B,” and eventually filled out the proper paperwork once government investigators came calling.
It turned out the woman was connected to a London crime group and was believed to be laundering the proceeds of various illegal activities.
The statement issued by the UKGC regarding Paddy Power’s voluntary settlement included six key points:
The commissioning of a review of Paddy Power’s AML and SR controls across its retail estate and its AML controls in its remote business to be undertaken by a third party at its expense:
- An agreement to the publication of a public statement by the Commission to share learning with the industry and the public;
- An agreement to share learning from the cases with the remote and non-remote sectors in a format to be agreed with the Commission;
- A commitment to amending policies and procedures to address the shortcomings identified in the course of the investigation;
- The payment of £280,000 in total to an agreed socially responsible cause, which represents a sum to remove any profits made from the three customers in question and a voluntary payment in lieu of a financial penalty;
- Agreement to contribute £27,250 to the Commission’s costs in investigating this matter.
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