Spreadex Limited ordered to pay £2m by UKGC for AML and social responsibility failures

A UK Gambling Commission (UKGC) investigation has found online gaming operator, Spreadex Limited, guilty of social responsibility and anti-money laundering violations. The iGaming firm must now pay a £2m fine as a result of these multi-sector deficiencies. 

Transgressions were initially uncovered during a “compliance assessment” in the summer of 2023 – in which offences pertaining to Spreadex’s fixed odds and casino licenses came to light. 

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Specifically, Spreadex failed to adequately scrutinise vital “customer, product, geographic and payment risks” between September 2022 and November 2023 – culminating in a verdict against the group for anti-money laundering and terrorist financing failures. 

Moreover, a UKGC-led probe brought substantial procedural failings to the fore. According to an official statement on the investigation, the organisation lacked due care when verifying where a consumer’s source of funds (SOF) had been derived. In one instance evidencing the business’s malpractice, a consumer was allowed to deposit £64,000 and lose £50,000 within one month. 

John Pierce, UKGC head of enforcement, discussed this particular case in a public statement: "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.” 

At no point throughout this period did Spreadex request SOF information from the individual.

Similar offences were seen on a wider scale, as Spreadex undertook repeat checks on consumer profiles without accounting for increased gambling risk as a result of greater deposits and activity. Per the UKGC’s report, this outlines a failure to recognise potentially preventable and elevated vulnerability among consumers. 

A notable social responsibility shortcoming saw Spreadex permit one consumer to deposit £3,340 - their maximum deposit limit - on 12 occasions within 14 months. The UKGC determined that the operator did not sufficiently contact the individual to abate possible gambling harm.

Four automated notifications were sent to the consumer through this 14-month span, with no human interaction initiated. 

The UKGC’s John Pierce also spoke of the numerous weaknesses attributed to Spreadex operations: “The conclusion of this case marks the second time Spreadex Limited has been subject to enforcement action. Its failure to uphold anti-money laundering standards, delays in necessary interventions, and weaknesses in social responsibility measures were unacceptable.”

In 2022, Spreadex was directed to pay £1.36m for AML and social responsibility defects.

Pierce continued to note the importance of a “coordinated approach” to mitigating industry-wide consumer risks: “We work closely with the Financial Conduct Authority (FCA) to ensure a coordinated approach. This is particularly critical when there are concerns regarding a customer’s gambling activity from an AML or social responsibility perspective. The ability to assess customer risk in a holistic manner is essential for effective risk management and is an expected practice.

"Effective social responsibility measures must be in place at all times to ensure that consumers identified as being at risk receive timely and proportionate interventions.”

The criminology veteran concluded with a warning to operators: "Operators should be in no doubt: repeated regulatory failings will result in escalating enforcement action.”