Gambling Commission imposes £630,000 penalty on Smarkets for series of failures

Online betting exchange and sports betting company Smarkets must pay a financial penalty of £630,000 after the Gambling Commission found a series of anti-money laundering and social responsibility failings.

The industry regulator said the failures included customers being allowed to gamble without adequate source of funds checks being carried out and not identifying and interacting with customers at risk of experiencing harm.

One customer was allowed to deposit £395,000 in a four-month period without the appropriate source of funds checks being carried out, while one individual transferred "significant" levels of funds between accounts without scrutiny or source of funds checks occurring.

Smarkets also received a formal warning and will undergo an audit to ensure it is effectively implementing its anti-money laundering and social responsibility policies.

The commission's deputy chief executive Sarah Gardner said: "This case was identified through compliance checks and once again highlights how we will take action against gambling operators who fail their customers.

"Our investigation into Smarkets unearthed a variety of failures where customers were put at risk of gambling harm.

"It was obvious that poor systems and processes were in place which contributed to these breaches, driven by the company's failure to effectively implement its policies and controls."

The Gambling Commission said Smarkets co-operated throughout the investigation and took corrective steps to address the failings it identified. The commission also said its review of the specific customers identified during its compliance assessment found no evidence of criminal spend.

Smarkets chief executive and founder Jason Trost said: "We fully accept the UKGC’s findings following investigation of some of our former procedures. We have worked cooperatively with the commission throughout the process and taken significant measures to implement their recommendations, investing substantially in our compliance function.

"We take our responsibility to have appropriate compliance policies in place extremely seriously. We will continue to work closely with the UKGC and other relevant stakeholders, and will take proactive steps in order to ensure further improvement to our procedures on an ongoing basis."

The Smarkets penalty is the latest punishment imposed by the Gambling Commission, who last week fined online operator LeoVegas £1.32 million for social responsibility and anti-money laundering failings.

Read this next:

Gambling Commission boss defends 'lack of transparency' on affordability checks

The Front Runner is our latest email newsletter available exclusively to Members' Club Ultimate subscribers. Chris Cook, a four-time Racing Reporter of the Year award winner, provides his take on the day's biggest stories and tips for the upcoming racing every morning from Monday to Friday. Not a Members' Club Ultimate subscriber? Click here to join today and also receive our Ultimate Daily emails plus our full range of fantastic website and newspaper content