The UK Gambling Commission has issued a £630,000 financial penalty to Smarkets after an investigation discovered a number of anti-money laundering and social responsibility shortcomings.

The online gambling operator received the financial penalty after it was found that customers were permitted to gamble without adequate source of funds checks being carried out, as well as failing to identify and interact with those at risk of experiencing harm.

In addition to the aforementioned figure, Smarkets has also received a formal warning and will undergo an audit to ensure it is effectively implementing AML and social responsibility policies, procedures and controls.

In response to the action, Jason Trost, Smarkets CEO and Founder, noted that “significant measures” have been taken to ensure procedures are heightened moving forward.

“We fully accept the UKGC’s findings following investigation of some of our former procedures,” he said. 

“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.”

Failings identified as part of the inspection include one customer being allowed to deposit £395,000 in a four-month period without the appropriate source of funds checks being undertaken.

Another was found to have transferred “significant levels of funds” between accounts without scrutiny or source of funds checks occurring.

Sarah Gardner, UKGC Deputy CEO, commented: “This case was identified through compliance checks and once again highlights how we will take action against gambling operators who fail their customers.

“Our investigation into Smarkets unearthed a variety of failures where customers were put at risk of gambling harm.

“It was obvious that poor systems and processes were in place which contributed to these breaches, driven by the company’s failure to effectively implement its policies and controls.”