August 11, 2022 3 min read

UKGC Fines Smarkets for Breaching AML and Social Responsibility Rules

The UK Gambling Commission has hit Smarkets with a £630,000 ($770,000) fine after an investigation by the regulator uncovered failings in social responsibility and anti-money laundering. Additionally, the operator received a formal warning and will have to undergo an audit. 

Smarkets Didn’t Provide Source of Funding Checks on Its Customers 

According to the UKGC, Smarkets allowed customers to deposit massive funds to their accounts without doing background checks. Additionally, the operator failed in identifying and interacting with customers that are at risk of developing gambling harm. Smarkets CEO/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.

Smarkets CEO/Founder Jason Trost

One of the examples in which Smarkets failed to meet the standards included a customer who was allowed to deposit £395,000 ($482,000) within 4 months. Smarkets did not conduct a background check on the customer. 

Another customer transferred massive amounts of money between accounts and the operator did not do a financing check. 

The deputy CEO of the UKGC, Sarah Gardner, stated that the case was uncovered via compliance checks and it shows the regulator’s dedication and effectiveness in terms of taking action against operators that “fail their customers.” 

Gardner went on to say that Smarkets’ actions allowed customers to be at risk of developing gambling harm and the company failed to “effectively implement its policies and controls.” 

The UKGC Is No Stranger to Fining Operators That Fail to Meet the Standards 

As one of the world’s most respected authorities, the UKGC is no stranger to penalizing even the most reputable gambling operators. At the start of August, the watchdog showed its resilience as it hit LeoVegas with a £1.32 million ($1.6 million) fine. 

Just like Smarkets, LeoVegas failed to meet AML and social responsibility policies. Additionally, the operator will undergo an audit to make sure that it implements its measures effectively. 

Leanne Oxley, UKGC’s director of enforcement and intelligence, stated that all operators that fail to meet the standards will suffer the consequences as the regulator will take action against them. She also noted that LeoVegas’ case is yet another example of operators failing to protect their customers and failing to prevent AML risks “within their business.” 

Last month, Tim Miller, the executive director of the UKGC, stated that the regulator will change its approach to imposing penalties

As a way to avoid the “scattergun approach,” the commission will launch new consultation windows. Miller also noted that the UKGC will be analyzing the new methodology next year and correcting issues where they are found. The ultimate goal will be to be the new gold standard in prevalence and participation. This is not the first change that Britain’s regulator has made in recent period. Back in June, it also altered the licensing process to make it more efficient.

Filip Mishevski has been covering online gambling and cryptocurrencies for the past few years. He has written countless articles, how-to-guides, insights and news, and is keen on sharing his extensive knowledge in the aforementioned fields. He’s very passionate about soccer and MMA and is interested in how the online gambling industry will shape our future and thus, influence our lives.

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