Dealing with errant operators

The UK Gambling Commission (UKGC) has fined online gambling company SpreadEx Limited ￡1.36m ($1.6m). The UKGC announced the penalty on Thursday, with the operator’s offenses relating to anti-money laundering and social responsibility practices. Socially responsible causes will be the recipients of the financial penalty as part of the UKGC settlement. The Commission discovered the failings following a regulatory review into SpreadEx after concerns were raised during a compliance assessment.

we note the swift and robust action the Licensee took to bring itself back to compliance”

Talking about the failures of SpreadEx, UKGC director of enforcement and intelligence Leanne Oxley 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.”

Oxley also emphasized that the UKGC expects other operators in the gambling sector to engage and commit to improving standards in a similar fashion.

Specific failures

The Commission outlined the specific violations in its press release announcing the financial penalty. The social responsibility-related failures included SpreadEx not having effective financial alerts in place, which meant that certain customers were able to lose significant sums in just a short time period.

overreliance on using financial alerts to identify potentially at-risk gamblers

There was also an overreliance on using financial alerts to identify potentially at-risk gamblers. SpreadEx was found to not be properly recording and evaluating customer interactions. In one case, SpreadEx allowed a user to deposit ￡1.7m ($2m) and lose ￡500,000 ($591,751) in just a single month. The customer interactions in this case were not properly evaluated and there was no prudent action taken by the operator.

In terms of the anti-money laundering failures, there were instances of users being able to deposit and gamble large sums of money without properly complying with source of funds requirements. In one example, a SpreadEx user deposited ￡365,000 ($431,978) and lost ￡284,000 ($336,114) during a three-month period without establishing their source of funds.

Not afraid to take action

The UKGC is one of the world’s strict gambling regulators, running a tight ship when it comes to oversight. One of its big focuses is making sure that licensees are properly protecting gamblers. That’s why there has been a raft of fines handed out recently for anti-money laundering and social responsibility failings.

Just last week, the UKGC issued a record-breaking ￡17m ($20m) fine to gambling group Entain for these types of violations. It also has handed out numerous other seven-figure fines so far in 2022, including a ￡9.4m ($11m) fine to 888 UK and a ￡3.15m ($3.7m) penalty to Camelot.