Spreadex hit with £2M fine in latest UK gambling crackdown

The fine, announced this week, follows a compliance assessment conducted in July 2023 and covers failings that occurred between September 2022 and November 2023. It comes on top of a £1.36 million settlement paid by Spreadex in 2022, also for AML and safer gambling breaches.

The case supports the narrative that regulators are stepping up to protect online gamblers, especially at a time when scrutiny was predicted across the UK gambling landscape.

Where Spreadex went wrong

The Commission’s investigation uncovered a worrying pattern of negligence in both money laundering defences and customer care obligations.

On the AML front, Spreadex was found to have failed basic requirements, such as assessing customer, geographic, and product risks. This is a foundational expectation of licensed operators. 

The business also relied heavily on self-reported financial information from customers, rather than verifying funds through independent sources.

In one example, a customer deposited around £64,000 over a short period. Despite the high transaction volume, no source of funds (SOF) checks were conducted. The player went on to lose £50,000 in a single month.

Social responsibility processes fared no better. Another customer hit a daily deposit limit of £3,340 on 12 occasions in just 14 days. Spreadex’s only interventions were four automated pop-up messages, with no human interaction or welfare checks recorded.

Unacceptable behaviour

John Pierce, the Commission’s Head of Enforcement, did not mince his words.

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.

He added that Spreadex showed delays in necessary interventions and failed to act swiftly even when clear markers of harm were present.

The regulator also flagged a more complex concern. One affected customer was using products regulated under two different regimes, raising the importance of cross-channel risk management.

In such cases, the Gambling Commission now works closely with the Financial Conduct Authority (FCA) to ensure proper oversight.

Regulators are watching

In addition to the financial penalty, Spreadex must now undergo an independent third-party audit to assess whether its revised AML and safer gambling procedures are robust and effective.

As the UK gambling sector faces increasing pressure to clean up its act, the Spreadex fine stands as a strong reminder that regulators are watching, and they’re not afraid to act.