Online Gaming’s Spreadex Fined More Than $1.6M by UK Gambling Commission

Posted on: August 25, 2022, 10:35h. 

Last updated on: August 25, 2022, 11:49h.

English Football League Championship soccer club Sunderland may be having second thoughts over its relationship with Spreadex, the financial trading and sports betting company. The company received a fine of £1.36 million (US$1.6 million) from the UK Gambling Commission (UKGC) over a number of failings.

Spreadex ad
Sports betting and financial trading company Spreadex advertising its name on a taxi in the UK. The company is the latest to receive a significant financial penalty from the UKGC. (Image: Taxi Advertising)

The UK’s gaming regulator hit the company with a fine for anti-money laundering (AML) and social responsibility failings. It’s the latest in a constant stream of fines the UKGC has levied against gaming companies, including the record $21-million fine it recently gave to Entain.

The UKGC has stated on several occasions that it’s going to step up its efforts to ensure operators comply with regulations. Since the beginning of the year, it has dished out more than $28 million in penalties.

Lack of Attention to Detail

Spreadex became Sunderland’s shirt sponsor in July. Long before that, beginning in June of last year, the UKGC had already begun looking into the company. What it found was a series of shortcomings that breached the regulator’s guidelines.

The company didn’t have mechanisms in place to properly alert it if gamblers spent too much money in too short a time. In addition, it wasn’t properly monitoring accounts to determine if there were signs of problem gambling.

One example the UKGC gave was a user who deposited £1.7 million (US$2 million) and lost a quarter of that in less than a month. If Spreadex had followed the UKGC’s recommended guidelines, it would have placed a limit on the account. Instead, it only contacted the customer to inquire about the activity and didn’t follow up with any additional protocols.

On another occasion, Spreadex configured a user’s account to alert the company if deposits exceeded £25K (US$29,520). The individual later increased the amount to £100K (US$118,130). Subsequently, Spreadex only relied on open-source data to determine if the increase was legitimate.

Another individual continued making deposits after raising flags. Spreadex asked the user to provide additional verification of financial solvency, but only received redacted bank statements in return. Despite a lingering degree of uncertainty, no one at the company pushed for more clarity.

In addition, there were repeated examples of failings tied to AML, with the company lax in maintaining its AML procedures. As such, the UKGC accused it of violating a number of regulatory statutes.

Righting the Wrong

After the UKGC notified Spreadex of the violations, it immediately took corrective action, according to the UKGC. That pacified the regulator, which authorized it to make the payment to a “socially responsible” organization.

This is in accordance with the UKGC’s framework on regulatory compliance. In some cases, settling violations results in a “payment in lieu of the financial penalty the [UKGC] might otherwise impose for breach of a license condition.” However, it’s still a fine, as it’s a form of punishment the operator must pay.

The UKGC has threatened to take a stricter approach to enforcement. The agency’s CEO, Andrew Rhodes, has warned that continued violations are a sign that operators aren’t taking the regulator seriously enough.

Leanne Oxley, the UKGC’s Director of Enforcement and Intelligence, hinted at this as well. In the announcement about Spreadex’s fine, she commented that it is “disappointing” that the regulator continues to see violations of the same rules by different operators.