Spreadex gets hit with £1.36m UKGC penalty

The past weeks have been busy for the UK Gambling Commission, Great Britain’s gambling custodian and regulator. In just under a month, the watchdog is meting out its third punishment, this time to Spreadex Limited, the operator of spreadex.com, which is being fined £1.36m over social responsibility and anti-money laundering breaches.

This marks the latest big penalty issued by the regulator since early August when the commission hit LeoVegas with a £1.32m fine, citing AML and social failures as well. The money will be paid to socially responsible causes. Yet, none of these penalties were as serious or as sizeable as the record-setting fine issued to Entain Group last week, the eye-watering £17m, which is the biggest penalty in the regulator’s history.

The United Kingdom is seized by political turmoil as the sudden exit of British Prime Minister Boris Johnson has delayed a long-anticipated White Paper that is expected to lay the groundwork for the review of the Gambling Act 2005, the current gambling law in the country that is overdue for an update considering the big changes that transpired in the industry over the past years.

The UKGC’s response to Spreadex’s fine, though, was more restrained in tone and severity, with UKGC Director of Enforcement and Intelligence Leanne Oxley appreciating the efforts that the License put in cooperating with the regulator and enacting the necessary measures to return to compliance.

"We expect similar commitment and engagement across the gambling sector," Oxley concluded tersely. The regulator went into enumerating the social responsibility issues it had detected that triggered a review and a subsequent fine. The UKGC explained that financial alerts employed by the company at the time of offenses were inefficient and enabled customers to lose significant amounts of money over a short period of time.

Such alerts were used to assess and identify customers who may be experiencing harm, the regulator added. There was also a lack of sufficient records that tracked interactions between the License and customers. According to the regulator, one customer was able to deposit £1.7m and lose £500,000 within a month. This event did not trigger a consideration to restrict the player’s account.

Anti-money laundering failures included an instance where a customer who had reached the £25,000 threshold for an alert, provided open-source information about his income, and had the alert raised to £100,000. In another instance, a customer deposited £365,000 and then lost £284,000 of the amount within three months.

However, no source of funds was established by the License. The commission detailed the specific failings under its explicit rules in a public statement. This said it has been a busy summer for the commission, with a number of regulatory actions taken against licenses over the past months.

The UKGC has denied accusations that it’s playing favorites with the sector and responded firmly against suggestions that the regulator should be replaced by a new governing body.

Image credit: Unsplash.com