Spreadex has been fined £2.0 million ($2.6 million) by the UK Gambling Commission for breaching anti-money laundering (AML) and social responsibility regulations.
The failures were discovered during a compliance assessment in July 2023, relating to Spreadex’s license to provide casino and fixed odds betting in Great Britain.
Providing details of the case, the commission stated that the breaches occurred between September 2022 and November 2023. Along with the fine, Spreadex will undergo a third-party audit to ensure proper implementation of AML and safer gambling measures.
Interestingly, this is not the first time Spreadex has faced regulatory action. In August 2022, it was required to pay a £1.4 million settlement for AML and social responsibility failures.
Player at Spreadex Lost £50,000 in 30 Days
Highlighting some of the AML shortcomings, the commission mentioned that Spreadex’s risk assessment for money laundering and terrorist financing was inadequate. The operator neglected crucial customer, product, geographic, and payment risks as mandated by the commission.
The commission criticized Spreadex for ineffective AML policies, procedures, and controls that failed to prevent money laundering and terrorist financing. It pointed out that Spreadex heavily relied on self-reported financial information from customers, allowing them to deposit large sums without verifying the source of funds.
As an example, the commission cited a case where a customer deposited £64,000 in a short period without being asked for the source of funds. Subsequently, the customer lost £50,000 within a month.
Identified Failures in Social Responsibility
The commission also flagged social responsibility lapses, such as Spreadex failing to interact more intensely with a customer who exceeded a daily deposit limit multiple times within a short period, potentially indicating gambling-related harm.
Despite the significant spending, Spreadex only sent four pop-up messages regarding social responsibility, without engaging in any direct communication with the customer.
Spreadex’s ‘Unacceptable’ Conduct
John Pierce, the head of enforcement at the Gambling Commission, criticized Spreadex for its failure to meet AML standards, delayed interventions, and weaknesses in social responsibility practices, deeming them “unacceptable.”
“Operators should not solely rely on customer assurances about the source of funds but should seek evidence from independent and verifiable sources,” Pierce emphasized. He stressed the necessity for operators to promptly respond to any suspicious activities.
Pierce highlighted the importance of effective risk management in assessing customer risk comprehensively and implementing appropriate social responsibility measures to aid consumers at risk.
He underscored the collaboration between the commission and the Financial Conduct Authority in addressing customer behavior concerns related to AML and social responsibility.
“Repeated regulatory failures will lead to increased enforcement actions against operators,” Pierce warned.
