GVC Holding Shares Drop After Ladbrokes Scandal
Shares of the FTSS 100 gambling operator, GVC Holding suffered a great slip last Monday, mid-morning. The reason behind that slip is that one of its subsidiaries that it acquired in the United Kingdom market, Ladbrokes, is facing claims regarding paying off victims of problem gambling “Hush Money.” According to reports from The Guardian this last Monday, Ladbrokes paid off problem gamblers, who stole money from their clients from their Dubai business to gamble at Ladbrokes. Ladbrokes gave them one million British Pounds in order not to tell the regulating body, the UKGC, about the incident.
GVC Holding's Ladbrokes Pays Hush Money for Problem Gamblers
The gamblers admitted the theft of the funds from their clients, with Ladbrokes paying the five problems gamblers money after accepting stolen money. The Guardian stated that the settlement agreement between Ladbrokes and the five punters said that Ladbrokes demands the victims not to make any complaints or reports to any regulator concerning that claim so that they can be eligible to get the money. The paper also showed that the company offered the gambling addicts several incentives to keep playing. These incentives included flight tickets from Dubai, as well as free tickets to the Royal Ascot company box, and Arsenal games. Although motivators are a common way through which the operators ensure the loyalty of their high-rollers, the issue came to light after the gamblers reported all that to the United Kingdom Gambling Commission and breaking the settlement terms.
One of the significant concern items were the text messages between the account manager and the customer. These text messages raised a lot of doubts regarding the compliance of the company to the regulations that aim to prevent money laundering and gambling addiction
The UKGC Tackles Operators Who Fail to Protect Problem Gamblers
The Gambling Commission that monitors the gambling industry in the UK stated that it is investigating this incident to stand on all of the facts and the full circumstances of this matter. There have been many cases resembling this one where the UKGC got millions of pounds in fines as a result of the gambling operators failing to spot and prevent gambling addictions as well as cases of money laundering.
For example, the FTSE 250 gambling operator, William Hill, got a £6.2 million fine last February because the gambling commission stated that William Hill failed to catch visible signs of gambling addiction. Therefore, it found it to be in breach of social responsibility and anti-money laundering regulations. It seems to have been a lousy year for William Hill, as the company is also facing a fine from the Netherlands regulating body because it offered services to players in Denmark. That is not all, as its website enabled them to translate it to Danish, and it supported one of the most popular and commonly used banking methods in Netherlands, iDEAL, which is only available for those who have a bank account in the Netherlands. Therefore, the government considered that William Hill was targeting its players illegally without acquiring a license to do so.