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888 Ordered to Pay Over $10 Million Fine for Technical Failure

One of the biggest things mentioned about a regulated online gaming industry is that, if a business goes awry of the regulations, there are methods of punishment that can be administered. A case in the United Kingdom against one of the biggest online gaming and poker companies in the industry is a clear demonstration of this fact.

According to the BBC, 888 Holdings, the operators of the popular 888Poker, a very reputable sports book and online casino (among other things), has been ordered by the British Gambling Commission to pay a £7.8 million (slightly more than $ 10 million U. S. dollars) for not adhering to protect at-risk customers. According to the Gambling Commission, there were “significant flaws” in a technical segment of the 888 software that failed to reject about 7000 players who had “self-banned” themselves from being able to bet on the site.

Reuters went into further detail as to how the violations occurred. 888 operates two separate products, Reuters reports, one for casino gaming, poker and sports betting and another outlet for bingo. While players might have excluded themselves from going directly to the casino/poker/sports side of the operation, it was found that it could be circumvented by going through the bingo side of the 888 operations.

Once particular case highlighted by the British Gambling Commission demonstrates what they believe were the flaws in the 888 Holdings’ “social responsibility process,” as the BBC called it. A customer of 888 was able to wager £1.3 million over a 13-month period, including £55,000 that the customer had stolen from his employer. Online for three to four hours a day gambling, 888 allegedly failed to “(interact) with the customer, given the frequency, duration and sums of money involved in the gambling,” the British Gambling Commission reported. “(These actions) raised serious concerns about 888’s safeguarding of customers at risk of gambling harm.”

£3.5 million of the fine will be used to settle claims from the 7000 players who weren’t blocked from playing after they had requested to be put on the list. Another £4.25 million will be donated to gambling support organizations to “invest in measures to tackle gambling related harm.” Finally, £62,000 will go to the company who was the victim of the player who embezzled money from the company to gamble.

The fine by far exceeds the previous record for a fine from the Gambling Commission. Last year a bookmaker, Gala Coral, was ordered to pay a £880,000 fine after not inquiring into the activities of a customer of their service. In this instance, the gambler was stealing money (to the tune of £800,000) to fund his gambling endeavors. While they started a preliminary investigation, Gala Coral received uncorroborated evidence that the player was “independently wealthy” and halted the investigation.

2016 also saw another prominent player in the online gaming industry take a hit. Paddy Power was ordered to pay £280,000 after they were accused of “encouraging” a problem gambler to continue wagering (the Gambling Commission does not explain how they “encouraged” the gambler). That person allegedly lost five jobs, his home and visitation and access of his children over the situation.

The seriousness of the fine is but another assertion that the British Gambling Commission, under the auspices of Sarah Harrison, the Chief Executive of the organization, that violations of the regulations in the United Kingdom will be dealt with severely. Before the 888 case, the Commission had stated that “the gambling industry should be on notice that the issues identified in this statement are likely to form the basis for future commission compliance activities.”

The fine is a substantial one for 888 Holdings. It represents 17% of the pre-tax profits from 2016 for 888, but it didn’t seem to have an impact on its current business operations. On the London Stock Exchange, 888 Holdings finished the day at 264.25p, a.48% uptick from the previous day’s trading prior to the fine announcement.

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