Smarkets Fined by the UK Gambling Commission Over Regulatory Failings

Posted on: August 11, 2022, 12:16h. 

Last updated on: August 11, 2022, 02:10h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

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) obligations, failures which will cost it a substantial amount of money.

Smarkets founder and CEO Jason Trost
Smarkets founder and CEO Jason Trost in the company’s office. The betting platform has received a hefty fine from the UKGC for AML and responsible gaming failures. (Image: Smarkets)

A week after the UKGC hit LeoVegas with a ￡1.32-million (US$1.6 million) fine, Smarkets will have to hand over ￡630,000 (US$769,923). The UKGC said today that the operator had a “series” of failings that led to the penalty.

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.

In addition to the financial impact, Smarkets will face scrutiny of its operations. It will need to submit to an audit to determine if there are other failings, and will stay on the UKGC’s radar for a while.

Variety of Failures

Gardner citations focused on a customer who deposited ￡395,000 (US$482,690) over 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 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 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 has already made changes to its compliance oversight.

UKGC Collects Millions in Fines

The UKGC receives tens of millions of dollars annually through voluntary payments from gaming companies, and 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, it handed out ￡23.44 million (US$28.64 million) in financial penalties across the eight months.