Paddy Power Betfair fined £490,000 for marketing to vulnerable consumers

The UK Gambling Commission has imposed a fine of £490,000 (€563,794/$604,918) on PPB Counterparty Services, commonly known as Paddy Power, for engaging in marketing activities directed towards customers who had previously self-excluded.

It is worth noting that Paddy Power’s £490,000 fine for marketing to self-excluded customers is a direct penalty rather than a regulatory settlement, which has been more common recently.

Self-exclusion apps are utilized by gamblers to voluntarily restrict themselves from gambling activities for a specified period. These apps are commonly used by individuals who struggle to control their gambling habits or who are considered vulnerable. GamStop is a multi-operator self-exclusion program in the online gambling sector.

Paddy Power (PPB) is being fined because, on 21 November 2021, their app sent a push notification offering enhanced odds for a football match between Spurs and Leeds to devices associated with accounts registered on GamStop or linked to self-excluded accounts under the licensee’s operation.

As a result of breaching the rules set by the Gambling Commission, PPB has been fined £490,000. The operator was responsible for taking all necessary measures to prevent any marketing material from being sent to self-excluded customers and promptly removing the data of self-excluded bettors from any marketing databases within two days of receiving the self-exclusion notification.

This fine comes a month after Betfair, owned by Flutter (PPB’s parent company), received a penalty fee of SEK 4 million from the Swedish Gambling Authority (Spelinspektionen) for allowing customers to bet on the Under-21 (U21) Allsvenskan football league.

CEO of Flutter UK&I, Ian Brown, issued a statement, apologizing for the mistake and emphasizing Flutter’s commitment to leading the industry in safer gambling. The push notification in question was sent in error, and immediate action was taken by their team to rectify the issue and notify the Gambling Commission proactively.

It remains unclear how many self-excluded customers actually received the message, as it required having the Paddy Power app installed and enabled push notifications.

It is important to note that self-excluded customers would not have been able to place bets or deposit funds due to the restrictions imposed by the company.

Kay Roberts, Executive Director of Operations at the Gambling Commission, highlighted the seriousness of such breaches, even if there is no evidence of intentional marketing, all affected customers receiving the notification, or self-excluded customers being allowed to gamble. Roberts advises all operators to learn from this incident and ensure their systems are robust enough to prevent self-excluded customers from receiving promotional materials.

Acknowledged violation

PPB acknowledged that its actions constituted a violation of SRCP 3.5.3, which, according to section 82(1) of the Gambling Act 2005, is considered a breach of license. Consequently, the Gambling Commission decided to impose a financial penalty on PPB. Initially, PPB filed an appeal against this decision, but later withdrew it and agreed to pay a substitute penalty of £490,000.

Furthermore, PPB agreed to engage an independent third party, at its own expense, to conduct an audit of its marketing communication processes and procedures.

Flutter, the parent company of Paddy Power, has implemented several safer gambling measures for its brands in the UK and Ireland. These measures include mandatory deposit limits for individuals under 25 and a maximum stake of £10 for all online slots.

In concluding the case, the Gambling Commission acknowledged that neither the regulator nor PPB received any customer contacts or complaints regarding the incident. The Commission also recognized PPB’s prompt notification of the incident, immediate remedial actions taken, and full cooperation throughout the process.

Kay Roberts, the Executive Director of Operations at the Commission, stated,

“While there is no evidence of intentional marketing, the visibility of the notification to all app users, or self-excluded customers being allowed to gamble, we take breaches like these seriously.”

Roberts advised all operators to learn from PPB’s shortcomings and ensure that their systems are robust enough to prevent self-excluded customers from receiving promotional materials.