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UKGC hits Spreadex with £2m fine over AML & safety breaches

The UK Gambling Commission (UKGC) has issued Spreadex Limited a £2m penalty due to failings in anti-money laundering (AML) procedures and social responsibility safeguards uncovered on the Spreadex.com platform.

The fine is in lieu of a compliance assessment undertaken in July 2023, which exposed lapses across customer due diligence and harm prevention protocols. Due to failings, Spreadex must now undertake an independent third-party audit to ensure its AML and safer gambling controls are being properly enforced.

The Commission’s investigation underscored a “breakdown in risk assessment. Spreadex was criticised for failing to consider core risk factors such as customer profiles, transaction methods and geographic exposure, as required under official AML guidance.

The investigation noted an over-reliance on customer self-reporting and a failure to request Source of Funds (SOF) documentation, even in high-stakes scenarios.

In one case, a customer deposited approximately £64,000 in a short window without prompting additional checks. The same individual went on to lose £50,000 in a month — yet Spreadex applied no enhanced due diligence.

The watchdog also highlighted the firm’s failure to adapt its scrutiny in line with changing behaviour. Repeat AML checks were applied with little regard for escalating risks, particularly in cases of growing deposits or intensified betting patterns.

On social responsibility, the report pointed to a striking example in which a customer hit a daily deposit cap of £3,340 on 12 separate days within two weeks. Despite this aggressive spend rate, Spreadex limited its response to four automated pop-up messages and failed to initiate direct, meaningful contact.

This is not the operator’s first reprimand with the regulator. In 2022, Spreadex paid a £1.36m settlement for similar AML and safer gambling failings.

John Pierce, UKGC Head of Enforcement stated: “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.

“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.”

The UKGC confirmed it continues to coordinate with the Financial Conduct Authority (FCA) to manage cross-sector risk, particularly where gambling overlaps with regulated financial services.

Spreadex still chasing Sporting Index 

In March, Spreadex won a court order with the Competition Appeal Tribunal (CAT), to have its bid to acquire main spread betting competitor Sporting Index revised by the Competition and Markets Authority (CMA).

At present, the CMA’s reassessment of the merger is ongoing, with no final decision made. Spreadex continues to pursue the acquisition, a merger that will remain subject to the outcome of the CMA’s renewed investigation.

 

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