The U.K. government has fined Ladbrokes Coral nearly $7 million for not protecting gambling addicts from themselves. It also fined the company for not having strong enough anti-money laundering procedures. This is the second time in less than a year the company has been in hot water with the government.
Ladbrokes Coral is one of the U.K.’s oldest gambling companies. Founded in the late-1880s, it served as a venue for gambling on horse racing. Horse racing is Ladbrokes’ specialty. Until the mid-1950s, Ladbrokes catered to the rich and titled, and no one else could bet through the company. When the United Kingdom legalized bet shops in the 1960s, Ladbrokes started building shops around the country. Ladbrokes began to have success and diversified its business. It started to focus on hotels and casinos.
There were a few scandals, however. One of the most notorious was in the 1970s when the company was bribing police officers. The officers provided the names of high rollers from competing casinos to Ladbrokes.
Ladbrokes has changed hands several times. Most recently, GVC Holdings purchased the company at the end of 2018. Ladbrokes and the Coral Group — an online casino company — merged in 2015. This merger gave Ladbrokes an online casino platform, as well as online sportsbooks.
The Recent Focus on Vulnerable Gamblers
The U.K. government and the gambling commission have been increasingly focused on the issue of problem gambling. Researchers estimate that about 2 percent of the gambling population is either problem gamblers or are addicted to gambling. While this is a small number, the media surrounding problem gamblers has brought it to the government’s attention.
For example, many social welfare and health-care officials have called on the government to put more money into treatment programs. Also, there has been a push to limit the amount of money gambled on the fixed-odds betting terminals, or FOBTs. The government has also limited advertising by sportsbooks during live televised sports. There have been stories in the press about gambling addicts losing thousands of dollars in one sitting. The U.K. government has responded by handing out fines, especially to gambling companies that do not protect vulnerable gamblers.
Recent Troubles for Ladbrokes Coral
The incidents involving Ladbrokes Coral began a couple of years ago. However, they have only just now come to light. First, Ladbrokes agreed to pay more than $1.2 million to the victims of a gambling addict. The addict is a British citizen and runs a property management business in Dubai. He stole money from his clients. He used that money to fund his gambling addiction. Ladbrokes encouraged the man to continue gambling. The company gave him thousands of dollars in free flights, sports tickets, comps to hotels, and other perks. In the meantime, the man stole from five clients. These clients sued Ladbrokes for the money they lost. Ladbrokes agreed to pay the victims back, with the proviso they could not tell the gaming commission.
However, the British Gambling Commission did find out about that problem gambler, as well as other customers. One customer lost close to £100,000 ($121,000) and asked the company to stop sending him promotions. However, Ladbrokes continued to send them until the commission ordered the company to stop. The gambling commission also found Ladbrokes had not put in place safeguards to protect customers from theft or money laundering. Three years ago, the commission told Ladbrokes to beef up its consumer safeguards, but it has failed to do so. The money from the fine will go to victim compensation funds and gambling addiction treatment centers.
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