Paddy Power Betfair has become the latest major UK gambling player to find itself on the wrong end of a UK Gambling Commission (UKGC) investigation.

The regulator confirmed this morning that it had issued a £2m penalty to the Flutter Entertainment-owned company, which operates the Paddy Power online and retail bookmaker and casino and online Betfair Exchange.

As with most other UKGC investigations, the penalty comes as a result of social responsibility failings. The £2m charge will be paid by four Paddy Power Betfair companies – PPB Entertainment, PPB Counterparty Services, Betfair Casino, and TSE Malta.

“This £2m settlement reflects the seriousness of the failings identified and the importance of meeting social responsibility and customer interaction standards,” said John Pierce, Commission Director of Enforcement.

“Our compliance assessment in 2024 uncovered examples where interactions fell far short of what is required. These failings should never have occurred.

“While the licensees co-operated fully with the investigation, accepted the failings early, and implemented an action plan quickly, this immediate response is the minimum we expect from operators when serious shortcomings are identified.”

Flutter takes action

The social responsibility failures that took place at Paddy Power Betfair will be familiar to anyone who follows the news around the UK gambling industry – largely being instances of failures to adequately interact with high and regular staking customers.

The Commission’s investigation concluded that Paddy Power Betfair’s systems were ‘not sensitive enough’ to identify markers of harm, citing several instances of customers depositing hefty sums during short periods of time before being identified for review or interaction.

Notable examples cited by the regulator included separate customers depositing £12,000 during 15 days, depositing £25,000 in 25 days, losing £12,300 in five weeks and staking £86,000 while losing £6,000 over 16 days.

Pierce continued: “Our compliance assessment in 2024 uncovered examples where interactions fell far short of what is required. These failings should never have occurred.

“While the licensees co-operated fully with the investigation, accepted the failings early, and implemented an action plan quickly, this immediate response is the minimum we expect from operators when serious shortcomings are identified.”

According to Flutter, however, the company has since initiated action to remedy the shortcomings identified by the UKGC. The firm, like others, has also been in the process of adapting its systems to new UKGC requirements, like finance risk checks, a flagship measure of the 2020-2023 review of the 2005 Gambling Act.

A Flutter spokesperson told SBC Media: “Flutter takes its safer gambling responsibilities incredibly seriously and we firmly believe that we lead the industry in player protection. Customer safety is our number one priority and there is no suggestion that any of the customers reviewed by the Gambling Commission experienced any harm.

“Our controls have evolved significantly and we recently introduced a next generation customer safety platform, with the vast majority of checks now happening in real-time. As such, we are confident that the issues highlighted by the Commission in its public statement would not be repeated today. We continue to invest in our technology and our people to raise standards in the regulated industry.”

Paddy Power Betfair not alone

This is the second time Paddy Power Betfair has been on the receiving end of a Commission penalty. In 2023 it was charged £490,000 after push notifications were sent to devices linked to self-excluded customers.

Paddy Power Betfair is hardly the only firm to find itself feeling the Commission’s regulatory wrath – Flutter’s online and high street rivals William Hill and Entain were both hit with record-breaking penalties of £19.2m and £17m in 2023 and 2022 respectively, while bet365 was charged £582,000 last year, and Betfred was hit with two charges this year.

“Operators must ensure systems to identify and address harm work effectively and at the right time,” said Pierce. “Over-reliance on automation and failure to intervene when clear harm indicators are present exposes consumers to unnecessary risk. Where we find failings, we will act decisively to protect players.”

Social responsibility failures and money laundering failures are almost always the reason for these investigations and subsequent enforcement actions. These regulatory decisions all occurred in the context of an extremely politically sensitive time for UK gambling – whether the Gambling Act review, 2025 tax debate, the debate around advertising, or the argument of gambling being a public health issue.

It is particularly bad PR for an industry which has been basing much of its arguments against over-regulation and overtaxation on the threat of the black market, arguing that illegal operators do not offer the same levels of player protection.

To make this argument stick, the regulated industry must ensure that it too is maintaining the highest of player protection standards – although with a myriad of regulations to adhere to, and checking customer finances in the retail space a particular challenge, this is far from an easy task.