The UK Gambling Commission imposed a £1.36-million fine on the online gambling operator Spreadex Limited after its investigation unveiled some anti-money laundering and social responsibility failings.
As part of its settlement with the UK gambling regulatory body, the company, which operates the spreadex.com platform, is set to make the payment to socially responsible causes.
As mentioned above, the gambling company failed to comply with a few anti-money laundering, terrorist financing, and customer interaction requirements. Gambling companies in the UK need to make sure they operate under the provisions of the Gambling Act 2005 and the conditions of their operating licences, and to also follow licensing objectives that imply ensuring a fair, safe and transparent manner of offering gambling services; preventing their services from becoming a source of crime or disorder or being associated with such; as well as protecting children and vulnerable individuals from being exploited by gambling or facing gambling-related harm.
The Commission of Enforcement and Intelligence of the UKGC, Leanne Oxley, noted it was disappointing to see social responsibility and anti-money laundering breaches in the sector, despite the Commission’s effort to publish cases highlighting similar failings. However, the watchdog remains ready to take robust action against licensees that fail to comply with the rules, as it continues to expect similar engagement and commitment across the gambling industry.
Spreadex’ Remote Operating Permit Subject to Regulatory Review
The investigation held by the UK Gambling Commission led to a regulatory review of the Combined Remote Operating Licence of Spreadex Limited (Number 000-008835-R-104580-017) under section 116 of the Gambling Act 2005. The regulatory review of the watchdog started on June 2nd, 2021 after some concerns were raised as a result of a compliance evaluation of the company held in May 2021.
The UK gambling regulator found that Spreadex breached a number of provisions of the Licence Conditions and Codes of Practice (LCCP) in the period from January 2020 to May 2021. The company violated paragraphs 1, 2 and 3 of licence condition 12.1.1 under which licensees are required to prevent money laundering and terrorist financing. According to the investigation findings, Spreadex also did not act in accordance with Ordinary Code Provision 2.1.1 regarding anti-money laundering. It was also found in breach of paragraphs 1 and 2 of Social Responsibility Code Provision 3.4.1 under which licensees are required to interact with users in a way that reduces the risk of gambling-related harm.
The investigation into the company’s operations found that Spreadex had not reviewed, updated, or adequately considered information on the money laundering risks. The operator demonstrated weaknesses and shortcomings linked to the maintenance and adequacy of its anti-money laundering procedures, policies, and control. Apart from that, there were no source-of-fund checks in a few instances when some customers were allowed to deposit large amounts of money without the necessary source-of-funds checks. The company’s financial alerts were found ineffective, as they resulted in customers losing significant amounts of money over a short period of time.
The UKGC took into account the fact that Spreadex took remedial action to get things right. So, in line with the regulatory Statement of Principles for Licensing and Regulation, the online gambling operator will pay a total of £1,363,786 instead of a financial penalty.
- Author
Olivia Cole
