Smarkets Slapped With Fine by the UKGC Over Regulatory Failings
Online betting operator Smarkets is the latest to find itself on the UK Gambling Commission’s (UKGC) radar. It faces allegations of not living up to its social responsibility and anti-money laundering (AML) responsibilities, which is going to cost it a substantial amount of money.
A week after the UKGC hit LeoVegas with a £1.32-million (US$1.6 million) fine, Smarkets is going to have to hand over £630,000 (US$769,923). The UKGC said in a statement today that the operator had a “series” of failings that led to the penalty.
In addition to the financial impact, Smarkets is going to face scrutiny of its operations. It will need to submit to an audit in order to determine if there are other failings and will also stay on the UKGC’s radar for a while.
A Variety of Failures
The UKGC’s deputy CEO, Sarah Gardner, stated that the regulator uncovered multiple failings that put customers at risk of developing gambling problems. She cited “poor systems and processes” at the company that facilitated the problems, adding that poor management prevented better oversight.
One example Gardner cited focused on a customer who deposited £395,000 (US$482,690) in four months. However, the UKGC said that Smarkets never bothered to determine where the funds came from or if the individual could afford to gamble that much.
Another violation occurred when the platform failed to act when a user began transferring large amounts of funds between different accounts. In that case, as in the first, Smarkets didn’t bother to perform obligatory source of funds checks on the individual or the movements.
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,” said Smarkets founder and CEO Jason Trost.
Smarkets, which recently announced that it is opening an office in Washington, DC, accepted the penalty. It stated that it will be more diligent in the future. In addition, the company pointed out that it has worked with the UKGC during the investigation and that it has already made changes to its compliance oversight.
UKGC Collects Millions in Fines
The UKGC, which receives tens of millions of dollars annually through voluntary payments from gaming companies, has had a banner year issuing fines. In January, it ordered Rank Digital Gaming (Alderney) Limited and Annexio (Jersey) Limited to pay a combined £1.3 million (US$1.58 million). Rank operates bellacasino.com, grosvenorcasino.com, meccabingo.com and meccagames.com, while Annexio runs lottogo.com.
That same month, it fined Genesis Global Limited £3.8 million (US$4.64 million) and suspended its license. Then, in February, it handed out another £2 million (US$2.44 million) in fines. The next month, it issued £13.72 million (US$16.76 million).
April and May were slow, with fines of just £675,000 (US$824,917) against Jumpman Gaming Limited and Progress Play Limited. It then added the LeoVegas and Smarkets fines this month. In total, across the eight months, it handed out £23.44 million (US$28.64 million) in financial penalties.
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