UK-based operator Spreadex Limited, which runs spreadex.com, has agreed to pay £1.36m after a Gambling Commission investigation revealed a wide range of social responsibility and anti-money laundering (AML) failures.
These include deficiencies in the operator’s responsible gambling policies, procedures, controls and practices, including weaknesses in implementation and as failures in its implementation of AML policies, procedures and controls.
However, Leanne Oxley, the Gambling Commission's director of enforcement and intelligence, said that although the findings are “disappointing”, and despite other cases with similar failures, the regulator praised the “swift and robust action the licensee took to bring itself back to compliance”.
“We expect similar commitment and engagement across the gambling sector,” Oxley said.
Mitigating action taken by Spreadex included making an early offer of a regulatory settlement, voluntarily suspending its casino activities for five months, providing an action plan immediately after the compliance assessment and taking effective action to expand and improve its compliance capacity, according to the commission’s settlement statement.
Spreadex and its senior managers were also cooperative with the regulator, acting “in a timely and transparent manner”.
The details of its failures paint a less favourable picture and include allowing one player to deposit £1.7m and lose £500,000 during the course of a one-month period.
“Although customer interactions had taken place they had not been sufficiently evaluated and did not include considering the effectiveness of restricting the account,” according to the Gambling Commission.
Other social responsibility failures included having financial alerts that were deemed to be ineffective and allowed customers to “lose significant amounts” of money over a short period of time.
Spreadex Limited also placed an overreliance on financial alerts to identify customers at potential risk of experiencing harm and did not sufficiently record or evaluate its customer interactions.
Among the AML failures, one customer who met a £25,000 financial deposit alert had the alert for further review increased to £100,000 based on a self-declaration of income and an open-source check.
Another customer was able to deposit £365,000 and lose £284,000 over a period of three months without the source of funds being sufficiently established.
The money from the settlement will be paid to socially responsible causes.
The breaches of Spreadex’s licence conditions and codes of practice (LCCP) were observed by the regulator between January 2020 and May 2021.
The Gambling Commission then commenced its regulatory review on June 2, 2021.
A number of firms have been punished in the UK in recent weeks. LeoVegas was fined £1.32m for AML and social responsibility failures at the start of August.
Since then, Malta-based Smarkets was penalised £630,000 for AML and social responsibility failures, as well as given a formal warning, and is required to undergo an audit.
Entain was then hit with the biggest penalty in UK history when it reached regulatory settlements of £14m for social responsibility and AML failings at its online Ladbrokes, Coral and Foxy Bingo operations and £3m for failures at its Ladbrokes Betting and Gaming unit on August 17.