The sports wagering company Ladbrokes has been fined nearly $80,000 for serious breaches of its licence and failing to limit damage caused by Gavin Fineff, a financial adviser who stole millions of dollars from his clients to service his gambling addiction.
Fineff has pleaded guilty to multiple fraud-related offences in the New South Wales district court and is awaiting sentencing. He lost more than $8m to sports gambling, with much of that money belonging to friends and clients, some of them elderly and vulnerable.
The Northern Territory Racing Commission, which regulates almost all online betting companies in Australia, found Ladbrokes failed to investigate whether Fineff could afford his extensive bets and the source of his money. Instead, the company enticed him to spend more money with bonuses worth $528,890.
“Right from the earliest moments of its first interaction with the gambler, Ladbrokes appears to have not given due attention to whether the gambler could afford to gamble to the levels that he was,” said an NTRC judgment dated 27 February.
“Rather than making any inquiries of substance as to whether the gambler could afford to gamble to these levels, Ladbrokes encouraged the gambler to open a betting account with it by providing attractive bonus and deposit rebate incentives as an inducement to open a betting account.”
The NTRC imposed three fines at the maximum penalty rate on Ladbrokes, totalling $78,540.
According to the NTRC, Fineff had already sustained multimillion dollar losses with other bookmakers before he opened an account with Ladbrokes using a pseudonym. It found “the gambler’s true identity was known to and verified by Ladbrokes”.
The judgment, signed by the NTRC chairman, Alastair Shields, found Ladbrokes “appears to have been more focused on realising its own profits from the gambler rather than ensuring that it was providing a responsible gambling environment.”
The victims of Fineff’s crimes never got their money back. The $758,510 he lost to Ladbrokes has not been returned.
“At the very minimum [Ladbrokes] should have undertaken some form of thorough and rigorous inquiry as to the gambler’s source of wealth,” the NTRC said.
A spokesperson for Ladbrokes’s parent company, Entain, accepted the NTRC ruling and said it focused on “interactions between a former customer and a former VIP manager between 2017 and 2019”.
“Entain Australia accepts the NTRC ruling, and since these interactions occurred it has invested significantly to strengthen its approach to customer protection,” the spokesperson said.
The director of policy and campaigns at Financial Counselling Australia, Lauren Levin, said Ladbrokes “failed its legal and moral duty to protect a customer who was clearly and knowingly at risk”.
“Gavin Fineff is in jail awaiting sentencing, having pleaded guilty and taking responsibility for his wrongdoing. Has anyone in the business been held to account for this monstrous behaviour luring in a person whom it knew to be addicted?” Levin said.
Levin said the NTRC’s judgment was “the most significant decision of the decade” and could set a precedent for gambling companies being required to investigate whether punters can afford bets before they are accepted.
Shields has previously said the NTRC would welcome the ability to impose tough financial penalties on companies licensed in the territory, which now have an annual turnover of $50bn.
“This decision endorses Ladbrokes’ business model of get as much as you can out of vulnerable customers and wear a slap on the wrist as a cost of doing business,” Levin said.
“The innocent victims should take this determination to the courts, and demand their money back. Why should Ladbrokes be guilty of so much, and still keep the $758,510 it earned off not meeting its licence obligations?”
In a submission to an ongoing parliamentary inquiry, Fineff said he would accept his punishment but wanted to see a change in regulation to stop “destruction continuing”.
“All it would have taken is a letter from the online wagering operator requesting proof of funds and affordability,” Fineff wrote in his submission.
His wife, Carly, expressed a similar sentiment.
“It’s good to see that Ladbrokes have been found guilty. However, simply asking for proof of income in the first place could have prevented the destruction of so many people’s lives.”
• In Australia, Gambling Help Online is available on 1800 858 858. The National Debt Helpline is at 1800 007 007. In the UK, support for problem gambling can be found through GamCare on 0808 8020 133. In the US, the National Council on Problem Gambling is on 800-522-4700
