Spreadex fined £2 million for anti-money laundering and social responsibility failings

Spreadex Limited has been fined £2.022 million by the Gambling Commission for anti-money laundering and social responsibility failings.

It is the second time in three years that the spread betting company behind spreadex.com has been the subject of enforcement action by the Gambling Commission, having also paid £1.36m in 2022 as part of a settlement into the same failings as its most recent fine.

The Gambling Commission found that Spreadex had taken insufficient steps to determine the source of funds being deposited by customers and relied too heavily on users reporting their own financial position rather than using third-party verification.

In one example, a customer opened an account and deposited approximately £64,000 within a short period, but no source of funds request was made and the customer went on to lose £50,000 within a month.

The breaches, which occurred between September 2022 and November 2023, also included customer interactions that were not deemed to be strong enough by the Gambling Commission.

The regulator cited one user who reached a daily deposit limit of £3,340 12 times in two weeks. Spreadex engaged with the user four times via pop-up messages, but did not carry out human interaction to ensure the individual was “not potentially suffering gambling-related harm”.

John Pierce, head of enforcement at the Gambling Commission, said: “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.

“Operators should be in no doubt: repeated regulatory failings will result in escalating enforcement action.”

Alongside the fine, Spreadex will undergo a third-party audit to ensure it is effectively implementing its anti-money laundering and safer gambling policies, procedures and controls.

The company is also in the process of appealing against a decision made last year by the Competition and Markets Authority (CMA) forcing it to sell Sporting Index. The CMA said the merger between the firms had created a monopoly, while Spreadex said users had "greatly benefited" since it had taken over its former rival.

In a statement, Spreadex said: "Spreadex note the recent public statement made by the Gambling Commission in relation to a review carried out into our Gambling Commission-regulated business 22 months ago in July 2023. We acknowledge the Commission’s findings and since the review have undergone a significant number of operational, procedural and technical improvements.

“Spreadex’s senior management team have been working closely with the Gambling Commission since the review took place and remain committed to providing our products and services in a fair and open way, which protects vulnerable people from harm and prevents gambling from being a source of crime or disorder, and we note the positive comments the Commission have made in relation to the swift and robust action we have undertaken since the review.”

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