Can US Sportsbooks Learn from UK Operators’ Mistakes? – Opinion
Posted on: March 29, 2023, 05:55h.
Last updated on: May 25, 2023, 06:08h.
One day after the UK Gambling Commission (UKGC) announced a record penalty against William Hill, the details behind what led to it still seem incredible.
In case you missed it, on Tuesday, the regulatory agency fined the bookmaker a total of £19.2 million (US$23.7 million) for a litany of failures that were amassed over a nearly 18-month span from May 2020 to mid-October 2021 in three William Hill subsidiaries. The findings were so egregious that UKGC Chief Executive Andrew Rhodes said the commission contemplated suspending the British-based gaming giant’s license.
“However, because the operator immediately recognized their failings and worked with us to swiftly implement improvements, we instead opted for the largest enforcement payment in our history,” Rhodes said in a statement.
If you want to see all that William Hill did, you can read the list in the commission’s release. If you just want some of the lowlights, here you go:
- Allowing multiple customers to open accounts and gamble thousands of pounds in short periods of time without any reviews;
- Lacking the ability to stop more than 330 people from gambling at one William Hill business even though those individuals self-excluded themselves at another William Hill subsidiary;
- Failing, on numerous occasions, to follow anti-money laundering guidelines by allowing bettors to deposit large sums without conducting the requisite checks or seeking proof of how the gamblers obtained their money;
- Approving a £100,000 (US$123,212) wager for a bettor despite that person only being approved for a £70,000 (US$86,248) line of credit;
- And failing to implement 24-hour delays for granting credit line increases after bettors have submitted them.
The UKGC’s release states that William Hill’s penalty exceeds the £17 million (US$20.9 million) fine levied against Entain last year. In addition, the UKGC has settled 25 other cases since the beginning of 2022 for more than £76 million (US$93.6 million).
Rhodes Sees Progress from UK Operators
Despite what happened at William Hill, Entain, and others in the not-so-distant past, Rhodes is maintaining a stiff upper lip in regard to the gaming industry’s future.
There are indications that the industry is doing more to make gambling safer and reducing the possibility of criminal funds entering their businesses,” he said. “Operators are using algorithms to spot gambling harms or criminal risk more quickly, interacting with consumers sooner, and generally having more effective policies and procedures in place.”
Caesars Entertainment officially acquired William Hill in April 2021, and the Nevada-based company sold the non-US portion of William Hill to 888 Holdings last July.
In an update to investors on the acquisition issued on April 7, 2022, 888 Holdings said in a footnote William Hill had previously set aside £15.2 million (US$18.7 million) “to cover the potential for any regulatory fine, penalty or settlement and associated cost” tied to a UKGC assessment conducted in the summer of 2021.
“This provision is the Business’s best estimate based on the action points raised to date by the UKGC, management’s current knowledge, and third-party regulatory and legal advice reflecting outcomes of previous compliance assessments and regulatory action across the industry,” the update stated.
An 888 spokesperson said. “The entire Group shares the GC’s commitment to improve compliance standards across the industry, and we will continue to work collaboratively with the regulator and other stakeholders to achieve this.”
Can US Operators Avoid Similar Outcomes?
What’s happened in the UK has been described as a possible future in the US as sports betting grows from its still-nascent roots here.
Critics have lambasted US industry operators for their advertising practices. State regulators have also issued citations for violations, but the fines for American books, like the US$500,000 (£405,830) DraftKings and the US$250,000 (£202,991) Barstool Sportsbook paid in Ohio, haven’t approached what the UK’s handing out.
Of course, even a state like Ohio is about a sixth of the size of the UK, but who’s to say that the federal government won’t get involved at some point? One New York congressman already wants an all-out ban on commercial advertising for sportsbooks.
With that in mind, maybe it was just a coincidence that a few hours after the UKGC announced its record-setting punishment, the American Gaming Association announced what it called its “most significant” changes to its Responsible Marketing Code for Sports Wagering.
The trade association is calling on operators to make several changes to their ads as part of the industry-regulated initiative. Those include no longer using “risk free” in promotions and prohibiting most marketing deals with colleges. That change excludes any responsible gaming education for students and still allows books to partner with alumni networks.
Some states have already enacted similar regulations. Ohio bans marketing on college campuses, and it, along with Pennsylvania, New Jersey, and others, has issued restrictions on advertising.
The AGA also wants operators to make 21 and older the “legal age of wagering,” and feature only people those ages in advertisements. Those new standards are to start immediately, although the association is giving operators a chance to update existing materials by July 1.
“Advertising plays an essential role in migrating consumers away from predatory illegal sportsbooks and into the protections of the legal, regulated market while providing responsible gaming resources,” AGA President and CEO Bill Miller said. “The AGA and our members are committed to building a sustainable marketplace that protects vulnerable populations and gives consumers the knowledge and tools to keep sports betting fun for adults.”
Will these steps, and possibly others, help US operators avoid the missteps of their British counterparts? Only time will tell.
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