Smarkets Fined for Failing AML and Social Responsibility

The GB Gambling Commission fined betting exchange Smarkets £630,000 (€747,037/$769,149) for several social responsibility and anti-money laundering violations, including allowing a player to deposit a six-figure sum without conducting the necessary checks. The regulator claims Smarkets failed to conduct adequate source-of-funds checks before allowing clients to gamble. The operator was also found to have neglected to recognize and assist customers in danger of damage. One customer’s ability to deposit £395,000 over four months without Smarkets doing the necessary source of funds checks was one of the specific instances mentioned in the Commission’s press release. The Commission also highlighted a situation where a person transferred a sizable sum of money between accounts without being observed or subjected to source-of-funds checks.

Therefore, the regulator concluded that Smarkets had broken licensing condition 12.1.1, which deals with anti-money laundering procedures and regulations. Smarkets discovered violations of the ordinary code provision 2.1.2, which is important to money laundering, and the social responsibility code of practice (SRCP) 3.4.1 for consumer interaction. The operator has also received a written warning and will undergo an audit to ensure it successfully carries out its anti-money laundering and social responsibility policies, procedures, and controls in compliance with section 117(1)(b) of the Gambling Act of 2005.

Sarah Gardner, deputy chief executive of the Commission, discovered this case through regulatory inspections and demonstrated how they would take action against gaming companies that fail their clients. Smarkets were the subject of our study, and we found various mistakes that put customers at risk of experiencing gambling-related damage. Clearly, the systems and procedures in place were insufficient since the corporation did not properly implement its rules and controls, which led to these breaches.

Jason Trost, the founder and CEO of Smarkets, told iGB that the company accepted the decision and would keep collaborating with the authorities to enhance its procedures. To implement the Commission’s recommendations, they have cooperated with them throughout the process and taken considerable measures, investing significantly in our compliance department, as stated by Trost. They also take responsibility for having appropriate compliance procedures in place very seriously. We will take decisive measures to ensure ongoing procedure improvement while collaborating closely with the Commission and other significant stakeholders.

The penalty comes after the Commission fined online operator LeoVegas £1.32 million last week for violating its social responsibility and anti-money laundering policies.