Gambling Commission Says Operators Must Improve with AML Policies

The Gambling Commission’s Director of Enforcement has been critical of some British operators’ approach to anti-money laundering (AML), stating there are often instances of a disconnect between risk assessment and policies.

Speaking at the Gambling Anti-Money Laundering Group (GAMLG) Annual Conference, John Pierce touched upon a number of issues, but highlighted several areas where the British regulator wants to see improvement. This included the controls put in place to carry out risk assessments.

Pierce said:

“We do have stories in the Commission where senior executives have been surprised at how policies are carried out in practice on the ground in their businesses. This of course is no laughing matter.

“That we continue to see this as an issue suggests the message hasn’t got through yet, so if you take anything away from this speech today, make sure you go back to your businesses and make sure your application and practice matches the outcomes of your risk assessments and what your policies say should be happening.”

Series of AML failures

There have been various notable instances of operators being fined for AML failures in recent times. Last October, Platinum Gaming, operator of Unibet, was fined £10 million by the Commission for AML and social responsibility failings.

The failures included money laundering/terrorist financing risk assessments failing to take into account customers whose accounts had been closed due to money laundering or terrorist financing concerns.

This was followed by a £650,000 fine for Videoslots last November, also for AML and social responsibility failures. The AML issues within the charge sheet included gaps in associated policies and procedures, record management omissions, and an over-reliance on an algorithm in attempts to identify and monitor customer behaviours.

Earlier that month, the Commission suspended the license held by the operator of the Victoria Gate Casino in Leeds for suspected AML failures and counter-terrorist financing risks.

VGC Leeds Limited is believed to have failed to maintain and implement effective anti-money laundering policies, procedures and controls.

“Training is crucial”

Pierce said:

“Training is crucial and we know there is good practice out there in the sector. But we are seeing some significant AML failings as a result of employees not being appropriately trained in AML and not sufficiently identifying risks. This has been seen for example, where bank statements or payslips provided have shown red flags or potential fraud which has not been identified and escalated.”

Pierce mentioned there have been issues where operators have failed to conduct sufficient due diligence when it comes to third-party business relationships.

The Commission has also seen cases where licensees are inadequately recording or failing to record the reasons behind their policies. An example of this would be not recording the outcome of a customer review and not including version controls for policies and procedures.

Looking into crypto

On a separate matter, Pierce said the Commission is looking into the possibility of regulating gambling via crypto payments. He said:

“Following FCA [Financial Conduct Authority] progress, we are looking at what the potential path forward would be for cryptoassets to be used as a consumer payment option.

“We know this is an area of real interest for the licensed industry and if done in the right way could ultimately be a way of future proofing our fight against criminal activity: a strength of our AML infrastructure, as opposed to a weakness.”