Introduction
On 18 February 2025, the UK Gambling Commission highlighted critical trends and emerging threats related to anti-money laundering (AML) within the betting sector. Speaking at the Gambling Anti-Money Laundering Group Training Day on 12 February 2025, Enforcement Director John Pierce outlined key insights that underscore the Commission’s commitment to ensuring a fair, safe, and crime-free gambling environment.
The rise of cryptocurrencies, offering anonymity and rapid cross-border transactions, has heightened risks within the UK gambling sphere, making it more challenging for regulators to trace illicit funds. Additionally, advancements in artificial intelligence are being exploited by criminals to create sophisticated fake identities and manipulate financial records. As financial crime tactics evolve, gambling operators must adapt their AML policies to better guard against money laundering and terrorist financing threats.
Types of Businesses Regulated under the UK Gambling Commission
The UK Gambling Commission oversees a broad spectrum of gambling-related entities operating in Great Britain, ensuring adherence to strict regulatory standards. These include both land-based and online operators:
- Betting Operators: Companies offering sports betting through physical betting shops and online platforms.
- Online Casino and Gaming Platforms: Operators providing digital casino games, slots, and other gaming services.
- Bingo Operators: Firms managing bingo halls or online bingo sites.
- Lottery Managers: Entities running lotteries, including external managers and software providers.
- Gaming Machine Suppliers: Businesses that manufacture, supply, or operate gaming machines.
- Remote Gambling Providers: Online gambling firms, including those using British-based equipment or targeting UK residents, regulated under the Gambling (Licensing and Advertising) Act 2014.
These businesses must hold a gambling operating licence and comply with the Commission’s Licence Conditions and Codes of Practice (LCCP) to legally operate and protect consumers from financial crime. They must also ensure their policies align with the Money Laundering Regulations 2017 (MLRs), which apply to all regulated businesses, including gambling operators.
The Gambling Commission’s Findings
The Commission’s recent analysis revealed several concerning trends highlighting vulnerabilities in the betting sector. Key findings include:
- Failure to Follow AML Procedures: In some instances, operators were not adhering to their own procedures to gather information on customers’ source of funds.
- Inadequate Customer Risk Profiling: Operators are failing to align customer risk profiles with all relevant risks, including transaction patterns, geographic exposure, and product usage.
- Ineffective Monitoring Triggers: Existing monitoring triggers do not sufficiently account for a customer’s income and wealth, leading to overlooked suspicious spending behaviours.
- Over-Reliance on Self-Reported Information: Know Your Customer (KYC) checks rely too heavily on self-declarations and public sources, which may not provide an accurate risk picture.
- Delayed AML Reviews: Customers have, in some cases, been allowed to conduct significant transactions before AML checks were completed.
- AI-related Threats: The Commission has flagged the misuse of artificial intelligence to forge documents and source of funds information. “ID farming” – where personal data is harvested to open bank accounts for illicit purposes – also presents a growing concern.
What Firms Can Do
To safeguard their operations from the threat of money laundering and terrorist financing, firms should implement the following measures:
- Enhance Customer Risk Assessments: Regularly update customer risk profiles to reflect transaction patterns, geographic exposure, and product use.
- Strengthen Due Diligence Processes: Thoroughly verify sources of funds and perform background checks, especially for high-risk individuals and cryptocurrency users.
- Improve Oversight of Payment Providers: Ensure payment providers comply with AML obligations and are closely monitored.
- Set Effective Monitoring Triggers: Implement both monetary and non-monetary thresholds that trigger timely customer reviews.
- Conduct Timely AML Reviews: Carry out AML assessments prior to any significant transaction to mitigate risk early.
- Invest in Staff Training: Conduct ongoing training on AML and Counter-Terrorist Financing (CTF) best practices, in line with regulatory expectations.
What Complyport Can Do to Help
Complyport offers a wide range of compliance and regulatory services to help gambling operators align with the Gambling Commission’s findings and bolster their AML and CTF frameworks. Our team can assist with:
- Reviewing and conducting customer risk assessments
- Building robust Anti-Money Laundering, Counter Terrorist Financing, and Counter Proliferation Financing frameworks
- Enhancing onboarding, KYC, and due diligence procedures
- Delivering independent AML audits and gap analyses
- Staff training on financial crime compliance and regulatory expectations
For tailored support in strengthening your AML and counter-terrorism financing framework, contact Complyport today. Our Subject Matter Experts are ready to assist with audits, training, risk assessments, and end-to-end compliance solutions.
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