UKGC fines Smarkets £630k over AML failures

The United Kingdom Gambling Commission (UKGC) has hit sports betting exchange operator Smarkets with a fine of £630,000 for violations regarding social responsibility and anti money laundering (AML). The fine came after a series of investigations on regulation compliance revealed the shortcomings of the operator.

According to the UKGC, London-based Smarkets violated the clause relating to terrorist financing and AML when it allowed a customer to deposit £395,000 over four months without due diligence on the source of the money. The operator was also negligent at scrutinizing a customer who transferred a “significant level of funds” between accounts.

Furthermore, the commission fined the operator for its failure to adhere to provision 3.4.1 of the Social Responsibility Code of Practice (SRCP), which stipulates that operators must interact with customers to minimize the risk of gambling harm.

Smarkets has received a formal warning and will be audited within 12 months of the review to ensure compliance.

In response, Smarkets CEO and founder Jason Trost said: “We fully accept the UKGC’s findings following investigation of some of our former procedures.

“We have worked cooperatively with the Commission throughout the process and taken significant measures to implement their recommendations, investing substantially in our compliance function.

“We take our responsibility to have appropriate compliance policies in place extremely seriously. We will continue to work closely with the UKGC and other relevant stakeholders, and will take proactive steps in order to ensure further improvement to our procedures on an ongoing basis.”

Sarah Gardner, Commission Deputy CEO, said: “This case was identified through compliance checks and once again highlights how we will take action against gambling operators who fail their customers.

“Our investigation into Smarkets unearthed a variety of failures where customers were put at risk of gambling harm. It was obvious that poor systems and processes were in place which contributed to these breaches, driven by the company’s failure to effectively implement its policies and controls.”

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