The failures, identified during a July 2023 compliance assessment, included inadequate money laundering risk assessments, inappropriate anti-money laundering controls, and insufficient customer interactions for potentially vulnerable gamblers.
This marks Spreadex’s second regulatory penalty, following a £1.36m settlement in 2022 for similar violations. The current breaches occurred between September 2022 and November 2023.
In one case, Spreadex allowed a customer to deposit approximately £64,000 within a short period without requesting proper source of funds information. The customer subsequently lost £50,000 in just one month.
Another concerning instance involved a customer who hit a daily deposit limit of £3,340 12 times within just two weeks.
Despite this clear indication of potential gambling harm, Spreadex limited its intervention to four automated pop-up messages rather than conducting direct human interactions.John Pierce, Gambling Commission head of enforcement, 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.”
Pierce emphasised that operators must not rely solely on customer assurances regarding source of funds but must obtain evidence from “independent and verifiable sources.”
The Commission also highlighted concerns about cross-channel usage monitoring, noting that one customer showing markers of harm was using products across areas overseen by different regulators.
Pierce added: “We work closely with the Financial Conduct Authority to ensure a coordinated approach. Operators should be in no doubt: repeated regulatory failings will result in escalating enforcement action.”
The penalty comes as the spread betting operator negotiates a complex competition probe following the acquisition of Sporting Index from French lottery and gaming giant FDJ United.
