The licence of the owner of betting exchange Matchbook was suspended in the United Kingdom because of "serious failings" over its anti-money laundering and social responsibility measures, the Gambling Commission said on Wednesday.
In one case, the regulator revealed, a customer put at risk more than £2 million in a single day without any source of funds or source of wealth being required.
Matchbook's owner Triplebet has been told to pay a £740,000 fine by the commission, while its licence will remain suspended until it can prove it has implemented the remedial measures required by the regulator.
In response, Triplebet said it had implemented all the commission's recommendations and was "excited" about relaunching for British customers.
Triplebet's licence was suspended in February following a review that began in August 2018, but the reasons for the move have remained unclear until now.
The Gambling Commission said its investigation had found serious failings in Triplebet's approach to anti-money laundering, the monitoring of business relationships and due diligence checks into members of gambling syndicates.
The commission said one of Triplebet's main customers was a syndicate, whose lead contributor was a professional gambler, "who also held a beneficial interest in Triplebet itself".
The regulator said that over an 18-month period from November 2016, the syndicate matched bets on the Matchbook exchange totalling in excess of $55 million (approx £44.7m/€50.7m), "without any documented risk assessment".
In terms of social responsibility, the commission detailed the case of a player who registered, played and then self-excluded on the same day who was subsequently able to reopen his account six months later.
He then played for ten hours a day on consecutive days and lost a large sum before self-excluding again, without any monitoring or interaction taking place.
Gambling Commission chief executive Neil McArthur said: "We have repeatedly made it clear that operators must put player protection at the forefront of their activities and ensure that they have effective anti-money laundering processes in place.
"We will not hesitate to use our regulatory powers, including the suspension and revocation of licences, if we need to do that to protect consumers and the public from gambling-related harm.
"Any operator that doubted that we were ready and willing to use the full range of our regulatory powers should think again. All operators need to learn the lessons from this case and our other enforcement cases."
Since January the commission has suspended the operating licences of Stakers Limited, MoPlay's parent company Addison Global Limited and International Multi-Media Entertainments Limited.
A Triplebet spokesperson said its welcomed the conclusion of the Gambling Commission's review.
They added: "Through working with the experienced compliance consultants we appointed in the middle of last year and, in spite of the impact of Covid-19 on our industry, we have already implemented all of their recommendations.
"We are committed to upholding every aspect of the UKGC regulations, and we are proud of all the hard work our teams have put in to get us to these final stages. We are excited about relaunching for our UK customers, who tell us they are looking forward to our return."