SpreadEx has been hit with a £1.36m penalty, in the latest in a series of regulatory enforcement actions by the UK Gambling Commission (UKGC).
The regulator cited social responsibility and anti-money laundering shortcomings as the reasons behind the financial penalty, the same factors behind a number of charges against other operators.
Just last week, FTSE100 giant Entain was charged £17m – the largest such charge in the history of British betting and gambling – whilst 2022 has also seen similar actions actions against Smarkets (£630k), LeoVegas (£1.32m), 888 (£9.4m) and Sky Bet (£1.17m).
Leanne Oxley, UKGC DIrector of Enforcement and Intelligence, said: “Whilst it is disappointing to see anti-money laundering and social responsibility breaches occur despite our extensive published cases highlighting similar failures, we note the swift and robust action the licensee took to bring itself back to compliance.”
Specific details of the case against SpreadEx – which operates the SpreadEx.com sports betting, spread betting and financial trading website and is a sponsor of Sunderland AFC – included ‘ineffective’ financial alerts which allowed customers to lose ‘significant amounts over a short period of time’.
The firm was found to be over-reliant on financial alerts for identifying customers at potential risk of harm, of not sufficiently recording and evaluating customer interactions.
One particular example saw a customer deposit £1.7m and lose £500,000 during one month, with interactions with the bettor in question ‘not sufficiently evaluated’ and failing to consider ‘the effectiveness of restricting the account’.
On AML failings, a customer who met a £25,000 financial deposit alert was able to increase the alert for further review to £100,000 based on a self-declaration of income and open source check.
Another customer deposited £365,000, losing £284,000, over a three month period without source of funds being ‘sufficiently established’, and another player was able to make deposits after providing redacted bank statements in response to an income verification check.
Concluding her assessment, Oxley stated that the UKGC expects ‘similar commitment and engagement across the gambling sector’ following SpreadEx’s ‘swift and robust action’ to bring its operations back in line with official AML and responsibility standards.