Spreadex has been fined £2 million by the UK Gambling Commission for breaching anti-money laundering (AML) and social responsibility rules, marking the second enforcement action against the operator.
The violations were uncovered during a compliance review in July 2023 and relate to Spreadex’s license to offer casino and fixed odds betting in Britain. The breaches occurred between September 2022 and November 2023. In addition to the financial penalty, Spreadex must undergo an independent audit to assess its implementation of AML and safer gambling procedures.
The Commission cited several failings, including a weak risk assessment that overlooked key factors like customer behavior and payment risks. The operator also relied too heavily on self-reported financial data and allowed large deposits without verifying sources of funds.
One customer deposited £64,000 and lost £50,000 in a month without any checks. Social responsibility failures were also highlighted. In one case, a customer exceeded their daily deposit limit of £3,340 on 12 out of 14 days but received only minimal automated messages and no direct intervention.
Gambling Commission enforcement head John Pierce called the failures in AML controls and customer protection “unacceptable.” Spreadex previously paid £1.4 million in 2022 for similar breaches.
John Pierce, Gambling Commission enforcement head, mentioned:
The operator placed undue reliance on customer assurances about the source of funds, rather than obtaining evidence from independent and verifiable sources, as we would expect. Operators must not only implement and maintain robust anti-money laundering policies, procedures and controls, but also act swiftly in response to any indicators of suspicious activity.
One customer, showing markers of harm, was using products across areas overseen by two different regulators. As the regulator, we stress the importance of licensees understanding and managing cross-channel usage in AML and social responsibility policies.
The ability to assess customer risk in a holistic manner is essential for effective risk management. It is an expected practice. Effective social responsibility measures must always be in place to ensure consumers identified as being at risk receive timely and proportionate interventions.
Operators should be in no doubt: repeated regulatory failings will result in escalating enforcement action.
