Retail betting may have got off the hook in comparison to its online counterparts with regards to tax, but an enforcement action against Betfred shows the sector is still just as subject to regulatory repercussions.

The UK Gambling Commission (UKGC) announced this morning that Done Brothers (Cash Betting) Limited, the firm behind the Betfred retail division, has been charged £825,000 for social responsibility and anti-money laundering failures.

This is the second time Betfred has been hit with enforcement action after the Commission found social responsibility and AML licensing requirements were not being fully met in some of the high-street giant’s 1,400 betting shops.

Back in 2023, the firm paid a £3.25m settlement to the Commission after the regulator concluded that some shops had insufficient controls and poor record keeping among other infractions. This is still dwarfed by the record penalties issued against two of its high-street competitors, however – Ladbrokes Coral owner Entain (£17m) in 2022 and Evoke’s William Hill (£19.2m) in 2023.

John Pierce, Commission Director of Enforcement, said: “While the failings identified during the 2024 Compliance Assessment were predominantly technical breaches rather than arising from specific customer examples, they were nevertheless unacceptable, particularly with thresholds appearing too high and insufficiently risk based when assessed in practice, and deficiencies in some processes and procedures adopted by the Licensee.”

What did Betfred do?

The licensing infractions identified by the Commission will be familiar to many, with the vast majority of the regulator’s enforcement actions over the past few years focusing around AML and social responsibility failures.

In this case, the Commission states that Betfred was unable to effectively manage money laundering risks related to B3 gaming machines, did not have an effective policy to handle customers subject to financial sanctions, and set inappropriate risk-based thresholds of £15,000 in losses and £125,000 in stakes within 365 days.

On the social responsibility side of things, it was determined that spend levels and financial indicators of gambling harm around B3 gaming machine use had not been adequately identified.

Upon risks being identified, customer interactions did not always occur and if they did occur the Commission asserts they did not minimise risk of gambling harm. Lastly, the regulator concluded that the quality of interactions did not meet required standards.

However, the regulator has noted that Betfred has taken the necessary steps to fix the gaps in its policies.

“We fully acknowledge the improvements the operator has already made since these issues were identified, and the independent audit will be key to confirming these changes are sustained so that the operator continues to be fully compliant with social responsibility and anti-money laundering requirements,” said Pierce.

Can retail betting hit back from the ropes?

High-street betting is Betfred’s bread and butter, though the firm does also have a considerable online offering via both a web-based sportsbook and casino platform.

Huge changes to Britain’s tax framework last week may prompt a revaluation of the firm’s product, as hinted by CEO Joanne Whittaker in separate interviews to The Times and SBC News earlier this year.

Last week, as part of Chancellor of the Exchequer, Rachel Reeves’ budget, it was announced that Remote Gaming Duty (RGD) will rise from 21% to 40% in April 2026 and General Betting Duty (GBD) from 15% to 25% in March 2027.

The rise in GBD has a number of exemptions, however, with retail betting largely left online, leaving online gaming to bear the brunt of the new tax costs. This will obviously hit the online operations of omnichannel firms like Betfred hard, but leave their retail offering much more unscathed in comparison.

Retail betting participation and gross gaming yield (GGY) have both been down according to Commission data, while online participation and GGY are consistently up. Exemption from GBD could be the breath of air retail needs, though shop closures are still a possibility as operators will look to cut costs across multiple areas.

Meanwhile, enforcement actions like today’s show that the retail side of betting is also not infallible. With political frustration with the industry, including retail, not going anywhere, operators will need to be at the top of their game to ensure long-term sustainability during the sector’s most challenging chapter yet.