Gambling Commission Warns Operators about Money Laundering

The United Kingdom Gambling Commission (UKGC) has published its Compliance and Enforcement report for 2020/21 and highlighted several failures in anti-money laundering (AML) and social responsibility.

According to UKGC, the failings are likely a result of the prioritization of profits over compliance. The report stated that “reasons for these failings are almost as concerning as the failings themselves” and explained that operators are “either not making suitable resources available or are simply putting commercial objectives ahead of regulatory ones.”

The failures included not having adequate due diligence measures in place, not applying due diligence to circumstances where it should apply, and relying too heavily on third parties to carry out due diligence checks.

Furthermore, many operators’ thresholds for checks were too high and based upon individual metrics rather than an overall picture. The Commission also found that many operators have “inadequate risk assessment methodology” for identifying money laundering and terrorist financing and failed to consider how problem gambling could also be linked to these issues.

The report cited many examples, such as the £6 million fining of Casumo in March when it allowed a player to lose £1.1 million without any responsible gambling interactions. One example of poor AML practices was a player being able to deposit £20,000 cash on two occasions while providing false identification, and another was a member of an organized crime gang using proceeds from cybercrimes at a high-end casino.

The UKGC also expressed concern that operators are more worried about the negative press than they are about reducing the risk of money laundering and terrorist financing.

The regulator said: “The Commission is continuing to see repeated examples of operators failing to undertake review of their risk assessments which take into account the Commission’s emerging risk publications. We continue to see insufficient due diligence checks which increases the risk of accepting illicit funds (including the proceeds of crime and terrorist financing).”

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