Gambling operator Spreadex Limited has been fined £2,022,000 following a Britain’s Gambling Commission investigation that uncovered significant shortcomings in its anti-money laundering (AML) and social responsibility practices. The penalties stem from compliance failures identified during an assessment in July 2023, related to Spreadex’s licence for casino and fixed odds betting operations via Spreadex.com.

Serious AML failures uncovered:

The regulator found that Spreadex’s Money Laundering and Terrorist Financing (ML/TF) risk assessment did not adequately account for key risks involving customers, products, geographic locations, and payment methods. This inadequate risk-based approach fell short of the Gambling Commission’s guidance, resulting in ineffective AML policies, procedures, and controls.

Critically, Spreadex placed excessive trust in customers’ self-reported financial information without demanding independent verification of the source of funds (SOF). In one highlighted example, a customer deposited around £64,000 over a short span without being asked for SOF documentation. This individual subsequently lost £50,000 within a single month. Furthermore, the operator failed to escalate due diligence when the customer’s gambling activity intensified, repeatedly performing the same basic checks instead of increasing scrutiny in line with risk.

The investigation also revealed weaknesses in Spreadex’s social responsibility safeguards. A particular case involved a customer breaching a daily deposit limit of £3,340 twelve times within a fortnight. Despite this clear warning sign, the operator’s response was limited to four automated pop-up messages without any direct human interaction to assess possible gambling harm.

Repeat enforcement action raises concerns:

This regulatory action marks the second time Spreadex has faced enforcement penalties from the Gambling Commission in recent years. In 2022, the operator settled for £1.36 million over similar AML and social responsibility violations. The latest fine and mandated third-party audit aim to ensure Spreadex adequately revises its AML and safer gambling policies, procedures, and controls to prevent further failures.

John Pierce, Head of Enforcement at the Gambling Commission, condemned Spreadex’s behaviour as “unacceptable,” highlighting the operator’s failure to uphold AML standards and the delays in making necessary interventions to protect vulnerable customers. Pierce stated in the regulator’s press release, “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.”

Pierce further emphasized the importance of managing cross-channel gambling activity risk, noting that one customer exhibiting signs of harm was engaging with products regulated by two separate authorities. He affirmed the Gambling Commission’s collaboration with the Financial Conduct Authority (FCA) to adopt a coordinated regulatory approach, particularly when AML or social responsibility concerns arise across different gambling channels.

“Effective social responsibility measures must always be in place to ensure consumers identified as being at risk receive timely and proportionate interventions,” Pierce added. He warned operators that persistent regulatory breaches will trigger escalating enforcement actions.

The fine and scrutiny of Spreadex arrive as the operator navigates a complex competition investigation connected to its acquisition of Sporting Index from the French lottery and gaming group FDJ United. This enforcement highlights the Gambling Commission’s continued vigilance in maintaining the integrity and consumer protection standards across Britain’s gambling sector.