Spreadex fined £1.36m for AML and social responsibility breaches

Spreadex Ltd, the owner of the spreadex.com financial spread and sports betting platform, has been directed by the United Kingdom Gambling Commission (UKGC) to pay a fine of £1.36 million after an investigation found the company to be in breach of social responsibility and anti money laundering guidelines. The operator is mandated to pay the money to socially responsible causes as part of the settlement with the Commission and in accordance with the body’s “Statement of Principles for Determining Financial Penalties”.

In a public statement, the Commission highlighted a number of failings committed by the operator between January 2020 and May 2021, which are mostly along the lines of lack of due diligence, failure to conduct customer interaction, and failure to prevent money laundering and terrorist financing. The Commission stated that the operator breached paragraph 1 of license condition 12.1.1 when it failed to acknowledge and assess all the customer product and geographical risk factors. Additionally, the operator allowed customers to deposit large sums of money without a source of funds (SOF) check or triggering sufficient interaction.

The Commission cited the case of a customer who had an alert after depositing £25,000 but was able to increase their next deposit to £100,000 with only a self-declaration of income and an open-source check. The Commission also cited the case of a player who continued to deposit after providing redacted bank statements when asked for evidence of the source of funds.

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In the aspect of social responsibility, the Commission noted that the operator had financial alerts that were ineffective which allowed “customers to lose significant amounts of money over a short period of time” and exposed vulnerable customers to gambling harm. One such case was a player being allowed to deposit £1.7m and lose £500,000 in just over a month, with no sufficient check or account restriction despite customer interactions.

Speaking on the ruling, 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. We expect similar commitment and engagement across the gambling sector.”

Aside from the £1.36m fine, the operator will also be paying £7,831 to cover the Commission’s costs of investigating the case. However, the regulator noted that Spreadex had a reduced fine because it took the breaches found seriously by going on a five-month self-suspension of all casino activities, among other penitential actions.

This recent fine is little compared to the record £17m fine the regulator gave to Entain over similar failings just over two weeks ago.

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