According to the Gambling Commission, Gala Coral failed to prevent gambling problems that lead to nearly £880,000 in payoffs to a VIP customer. Gala Coral took hundreds of thousands of pounds from a gambler whose wealth came from almost £850,000 in stolen money from its shops and other venues. This VIP had a gambling problem and was using stolen money feed his addiction.
The bookmaker, responsible for handling money laundering and problem gambling, admitted to having inadequate safeguards. The company stated they had systematic faults in their approach to detecting gambling and money laundering issues. Their shortcomings were revealed early in the settlement proceedings. Their goal was to prevent a review of their gambling license by the regulator.
Problems began when Gala Coral noticed the VIP’s spending was much higher than his proposed income. This sent up a red flag. Staff members stated that friends and family of the individual verified his wealth when met at hospitality events organized by Gala Coral. The company felt it didn’t need to seek further verification or challenge these statements. In addition, payments were made through a reputable UK bank. They did not conduct inquiries regarding the source of his funds. Gala Coral was subject to criticism for not suspecting that a man making a living as an electrician had a gambling addiction problem.
Inquiries led to discover the customer’s habits could have been used to identify his gambling problems. His online and in-store patterns could have detected tell-tale signs of his addiction. Campaigners with the goal of creating awareness and combating gambling problems stated Gala Coral was guilty of this type of problem in the past. They were told three years previously by the Gambling Commission that another customer laundered nearly £1m through Gala’s fixed odds betting terminals. A spokesperson for the Campaign for Fairer Gambling, Matt Zarb-Cousin, said he was not surprised nothing has changed. The regulators are allowing the same issues to occur. He felt that if Coral was serious about preventing gambling problems and money laundering, steps could be taken. An inclusion in the EU’s 4th money laundering directive would require any player staking £1,500 or more to provide identification.
The VIP gambler and customer of Gala Coral between 2012 and 2015 was sentenced to three years in jail for theft. Gala Coral was accused of relying on unsubstantiated claims the man was independently wealthy. In reality, he stole £800,000 from an unsuspecting individual in order to pay for his debts. Compensation from Gala will occur in the sum of £846,664 to the victim of the theft as well as his family. They will also be responsible for the commission investigation fees, a sum of £30,000.
In response to this event, Gala Coral has promised to take the necessary steps to increase their social awareness of gambling and money laundering issues. The settlement also reflects the commission’s efforts to crack down on bookmakers who are not dealing appropriately with gambling issues and money laundering.
The commission dealt with a similar incident earlier this year. Paddy Power paid £280,000 when the commission discovered Paddy had encouraged a man with a gambling problem. The man had lost his home, been fired from 5 jobs, and lost access to his children. They are hoping the industry will learn their lessons from these cases. The commission is putting out notice that a precedent has been set that the gambling industry will be accountable for future compliance issues.
The commission feels Gala Coral has responded appropriately and will take positive actions to ensure they will be addressing their failings. They will take an active initiative to monitor the habits and finances of their customers in order to keep gambling safe. Gala stated they had addressed the issue with the VIP customer before investigations began. They claimed they had stopped doing business with him but they will continue to improve detection of money laundering and tighten customer monitoring. With these measures in place they hope to prevent any future gambling problems.