Done Brothers (Cash Betting) Limited, better known across the UK retail betting sector as Betfred, has unfortunately been hit with a major regulatory blow. This happened after the UK Gambling Commission (UKGC) confirmed a £825,000 Betfred penalty relating to anti-money laundering (AML) and safer gambling failings.
The enforcement action follows a 2024 compliance assessment of Betfred’s high street betting shops, with regulators focusing specifically on the controls applied to B3 gaming machine usage. This is a category that has long been considered to carry a heightened money laundering risk in UK betting shops.
According to the regulator, the review uncovered Betfred AML failures and significant social responsibility breaches, ultimately leading to the financial penalty, a formal warning, and mandatory independent auditing of the company’s policies and procedures.
Details of the £825,000 Penalty
The Betfred UKGC fine aims at the operator’s inability to effectively monitor and manage risk indicators among customers using B3 gaming machines. The Commission noted that, although Betfred utilized alert systems and daily monitoring reports, the company failed to interpret or act on these signals in a sufficiently risk-based way. As a result of these failings, Done Brothers must do the following:
- Pay an £825,000 penalty
- Accept an official warning
- Undergo a third-party audit to evaluate the effectiveness of its AML and safer gambling systems
The UKGC emphasized that the audit would assess whether Betfred’s current controls are capable of preventing further misconduct. This is a sign that the regulator seeks measurable improvement from the operator following repeated compliance concerns.
Key Anti-Money Laundering Failures
The UKGC discovered several areas where the operator’s AML framework fell short of regulatory requirements. The most prominent Betfred AML failures include:
1. Poor Visibility of Customer Spend
Betfred was unable to establish an accurate picture of overall customer spend, especially for high-frequency B3 machine users. This limited the operator’s ability to assess money laundering or terrorist financing risks associated with cumulative activity.
2. Outdated and High-Risk Thresholds
The thresholds triggering source-of-funds (SOF) checks were deemed too high and not “appropriately risk-based,” including:
- £15,000 in losses within 365 days
- £125,000 in stakes within 365 days
These high figures significantly exceed what the Commission considers proportionate for retail gaming machine environments.
3. Lack of Sanctions Screening
Betfred did not have a robust or systematic policy for identifying customers who may be subject to UK financial sanctions, a requirement under AML and counter-terrorism financing regulations.
Collectively, these shortcomings illustrate what the regulator described as insufficiently risk-based processes, particularly concerning B3 machine monitoring.
Safer Gambling Shortcomings
In addition to AML concerns, the UKGC highlighted Betfred social responsibility breaches, particularly relating to the operator’s oversight of customer behavior on gaming machines. The key failings included the following:
1. Failure to Identify Harmful Gambling Patterns
Betfred did not adequately recognize concerning spend patterns, intensity of play, or other financial indicators of gambling harm among B3 machine users.
2. Weak or Non-existent Customer Interactions
When risk indicators were triggered, Betfred either:
- Failed to conduct any customer interactions
- Conducted interactions that were low-impact, superficial, or not designed to reduce harm
- Did not adequately assess whether such interactions had any meaningful effect
The UKGC stressed that these gaps meant customers were not protected from escalating risk, contrary to regulatory expectations.
Regulator’s View and Previous Action
According to statements from the UKGC’s Director of Enforcement, the issues identified were “largely technical” but unacceptable, pointing to thresholds and processes that were outdated and insufficiently risk-based for real-world retail gambling environments.
This latest sanction follows Betfred’s £3.25 million settlement in 2023, also relating to AML and social responsibility failures, underscoring persistent weaknesses in the operator’s control frameworks. The regulator noted that repeat violations raise serious concerns about the operator’s compliance culture.
Earlier this year, the UKGC also issued a £650,000 penalty against NetBet Enterprises Limited for similar AML and safer gambling breaches, alongside a requirement for an independent audit of its operations.
Conclusion
The £825,000 Betfred penalty demonstrates that the UKGC continues to prioritise robust AML and safer gambling compliance. This is especially focused on the retail betting environment, where B3 gaming machine compliance has repeatedly surfaced as a high-risk area. The upcoming third-party audit will be crucial in determining whether Betfred’s internal controls can finally meet UK regulatory standards. If the operator fails to rectify these issues, the UKGC is likely to escalate its response.
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