The gambling sector thought it had endured a bad start to 2018 with the outrage about women wearing insufficient items of clothing at ICE but William Hill showed that things could always get worse.

William Hill is to pay £5 million for breaching regulations and divest itself of the £1.2 million it earned from transactions with ten customers. This comes shortly after GVC Holdings being fined £350,000 and 888 Holdings paying a penalty package of £7.8m.

Shadow Culture Secretary, Labour MP Tom Watson said on social media:

William Hill has just been fined £6.2m by the Gambling Commission for accepting money from criminals without carrying out proper background checks. And this is an industry that talks about ‘responsible gambling’ They’re turning a blind eye to dirty money.

The national media covered the news prominently, many outlets using the term money laundering, probably because the press release from the Gambling Commission used it.

For those of us that have been watching the fictional Netflix series (based on a true story) Narcos about the escapades of Colombian drug cartels, or Ozark, a fictional drama all about money laundering, “money laundering” takes on a different meaning to the facts of the William Hill case.

Money laundering is defined as “the process of creating the appearance that large amounts of money obtained from criminal activity, such as drug trafficking or terrorist activity, originated from a legitimate source. The money from the illicit activity is considered dirty, and the process “launders” the money to make it look clean.”

The Crown Prosecution Service (CPS) website states that when investigating the proceeds of crime, money laundering offences are likely to be disclosed.  The William Hill case shows that proceeds of crime did take place but did money laundering take place?

The CPS defines and explains the process:

Money Laundering is the process by which criminal proceeds are sanitised to disguise their illicit origins. Acquisitive criminals will attempt to distance themselves from their crimes by finding safe havens for their profits where they can avoid confiscation orders, and where those proceeds can be made to appear legitimate.

Money laundering schemes can be very simple or highly sophisticated. Most sophisticated money laundering schemes involve three stages:

Placement – the process of getting criminal money into the financial system;

Layering – the process of moving money in the financial system through complex webs of transactions, often via offshore companies;

Integration – the process by which criminal money ultimately becomes absorbed into the economy, such as through investment in real estate

An argument could be made that placement had taken place, the money had gone from the client’s bank account to William Hill’s bank account.  In so doing it went through the banking system, and banks are required to check that the funds have not been laundered.

In the Gambling Commission press release account of what occurred, I saw no evidence of layering and integration. If that had taken place, then I assume the CPS would have been involved in a prosecution of William Hill. To date it has not.

Call it “gain from the proceeds of crime” but certainly not money laundering. Using the term inappropriately creates confusion and misunderstanding as to what has happened. Indeed, I suspect that the individuals involved lost their money, and thus did not complete the process towards integration.

By Warwick Bartlett