Paddy Power Betfair has agreed to pay a regulatory settlement of £2 million ($2.7 million) after Great Britain’s Gambling Commission flagged a series of social responsibility failures relating to customer interaction across a number of leading brands.
Failures were identified during a commission-led investigation between April and May of 2024 across four remote operators owned by Paddy Power Betfair. These included brands running under the trading names PPB Entertainment, PPB Counterparty Services, Betfair Casino and TSE Malta.
The issues related to paragraphs 1, 4, 7, 8 and 11 of Social Responsibility Code Provision (SRCP) 3.4.3 on remote customer interaction. All four licensees failed to comply with these Licence Conditions and Codes of Practice (LCCP).
Gambling harm measures fall short at Paddy Power Betfair
First, paragraph 1 requires licensees to implement effective customer interaction systems to minimise the risk of customers experiencing gambling harms. The commission said this had not always been the case, with systems not “sensitive enough” to identify instances of overnight play, the velocity of deposits and exhausting limits.
One player deposited £12,000 with Betfair 15 days before being identified for manual review and a two-way interaction being performed. Another Betfair user deposited £25,000 in 25 days before being identified and interacted with.
UK regulations require operators to monitor customer activity to flag potential harm as soon as an account is opened. While the regulator said some systems were in place, it noted examples where the speed of spend, increasing deposits, overnight gambling and changing betting patterns were not identified or acted upon until the next day.
In one case, a customer lost £12,300 in five weeks on Betfair before being identified for an interaction. An interaction was attempted when the player hit the trigger, but this was not successful, so a £500 monthly deposit limit was placed on the user’s account. However, the user was allowed to continue gambling.
“The licensees should have considered if stronger action was needed on hitting the trigger, such as preventing the customer from further depositing until an interaction had taken place,” the commission said in a statement on Wednesday.
No review over £86,000 spend in 16 days
Addition failings included not flagging indicators of risk of harm in a “timely manner” for manual intervention. The commission said licensees’ systems failed to flag certain indicators and feed into automated processes.
One player staked £86,000 on Betfair in an 18-day period, losing £6,000 in the process. Here, Betfair failed to conduct a manual review, with the customer only receiving four automated interactions during play.
Betfair also failed to interact with a customer who showed “intense” spikes in activity across volume and staked amount. During a 17-day period, the longest gaming session was seven hours and 46 minutes, where they placed over 300 bets amounting to £20,000.
“This behaviour was only identified as an indicator of harm when the customer hit a loss trigger, and the account was manually reviewed,” the regulator said.
These failures also related to licensees not taking appropriate action in a timely manner when they had identified the risk of harm.
It said some triggers were activated but almost always the day after a gambling session finished. The regulator also flagged how tailored action took place swiftly if indicators were at higher levels.
Finally, the commission referenced SRCP 3.4.3 paragraph 11. This sets out how strong harm indicators must be acted upon in a timely manner by implementing automated processes.
During the assessment, Paddy Power Betfair licensees allowed some customers to spend large amounts overnight. The regulator said this showed that the action taken was “not sufficiently timely”.
‘Overreliance on automation exposes customers to unnecessary risk’
Ruling on the case, the commission acknowledged how Paddy Power Betfair accepted the failings at an early stage. It also said the business “swiftly” put an action plan in place to address the issues and that it fully co-operated with the investigation.
However, the regulator also referenced the “serious” nature of the breaches identified and the impact on the licensing objective of protecting vulnerable persons. As such, it approved a regulatory settlement in lieu of a financial penalty. Paddy Power Betfair also agreed to contribute to investigation costs.
“This settlement reflects the seriousness of the failings identified and the importance of meeting social responsibility and customer interaction standards,” said John Pierce, director of enforcement at the commission.
“Our compliance assessment uncovered examples where interactions fell far short of what is required. These failings should never have occurred. While the licensees co-operated fully with the investigation, accepted the failings early and implemented an action plan quickly, this immediate response is the minimum we expect from operators when serious shortcomings are identified.
“Operators must ensure systems to identify and address harm work effectively and at the right time. Over-reliance on automation and failure to intervene when clear harm indicators are present exposes consumers to unnecessary risk.”
Incidentally, this was the second time Paddy Power Betfair faced regulatory action in Britain. In 2023 it was fined £490,000 for marketing to vulnerable consumers.
The commission has also ruled on several other cases in recent weeks. These include fining Videoslots £650,000 for breaching anti-money laundering (AML) and social responsibility rules. NetBet was also ordered to pay £650,000 over AML and social responsibility failings.
Failures were identified across four remote operators owned by Flutter Entertainment.