Engaging about Anti-Money Laundering – Speaking at the GAMLG Training Day
Our Enforcement Director John Pierce shares further information on recent casework and key trends after speaking at the Gambling Anti Money Laundering Group (GAMLG) Training Day.
Posted 14 February 2025 by John Pierce
On Wednesday, 12 February, I had the pleasure of speaking to a large industry audience at the GAMLG Training Day. It was a great opportunity to share insights on managing Anti-Money Laundering (AML) risks across the sector - both the significant progress made in recent years and the ongoing need for vigilance. I also highlighted key AML failings that my team at the Gambling Commission has observed in recent casework.
Following the event, we have decided to share this information, not only covering recent casework but also an overview of emerging trends, so that those who couldn’t attend can also benefit. As I mentioned at the event, ‘by working together, we can prevent criminal and terrorist actors from gaining a foothold in Great Britain and reduce the risk of money laundering across the gambling sector.’
What we’re seeing in case work
Whilst I want to make clear that the Commission has seen improvements in recent years, we have found cases where customer risk profiling and ongoing monitoring does not reflect the risks that the business has identified in their risk assessment. We encourage operators to review their monitoring procedures and customer profiles, to ensure that a customer’s risk profile aligns with a full range of risks, such as geographic, customer transaction and product risk. As well as this, customer risk profiles should reflect all the information the business holds on a customer.
We also continue to see cases of operators with enhanced customer due diligence and know your customer triggers that are ineffective at managing money laundering and terrorist financing risk. This includes:
- procedures that do not appropriately take customer salary or wealth into consideration to identify disproportionate spend
- high financial triggers that allow large sums of money to be transacted before the first AML review is undertaken on a customer
- operators relying on financial triggers alone, rather than taking a risk-based approach and considering the knowledge they hold of the customer and their risk profile
- operators should also consider setting realistic and effective monetary and non-monetary thresholds and triggers for determining when further information should be sought from customers, as well as seeking such conversations earlier on in the customer relationship.
The Commission has also identified that, where AML reviews are being conducted, some operators are not appropriately obtaining and scrutinising source of funds and source of wealth information in line with the risks seen. This included seeing cases of:
- operators over-relying on customers’ self-declarations and open-source information to manage money laundering and terrorist financing risks
- operators not following their own procedures to obtain Source of Funds (SoF) information at certain points
- a key failing identified is operators not appropriately scrutinising the SoF information they receive. We emphasise that we expect SoF information to be requested on a risk-based approach but, where this is done, it should not be treated as a tick-box exercise. It is key that staff are given sufficient guidance on how to review documents and identify red flags, how to verify SoF information, and how to record their decision making.
Emerging threats
I was also able to share an overview of emerging threats with GAMLG on Wednesday. These threats, that you should be vigilant of are:
- changes to customer demographics in the high-end land-based casino sector not being reflected in risk assessments, policies, procedures and controls
- customers using artificial intelligence to forge ID/SoF documents
- we’ve noted an increase in the organised use of mule accounts and fraudulent activity, particularly in the betting sector. We have also identified cases of ID farming where individuals or companies have collected personal data to obtain bank accounts and open gambling accounts for use in fraud
- although not new, the use of crypto currencies presents new challenges. As crypto currencies become more prevalent, we expect more payment providers to offer crypto payment facilities. Operators need to have a full understanding of the services provided by their payment providers
- in the white-label space, we continue to see cases where operators have not risk assessed their relationships with their white label partners and have not completed appropriate due diligence.
The Commission and I fully recognise the importance of ongoing collaboration between industry and the regulator in tackling and managing money laundering and terrorist financing risks. That’s why, in the year ahead, we are committed to strengthening our engagement in the AML space, including increasing our presence at similar events in future.
As I mentioned on Wednesday, combating money laundering and terrorist financing is a challenge we must tackle together. These risks pose a serious threat to businesses, consumers, and society as a whole; and the Commission remains steadfast in addressing them. Your businesses and operational practices serve as the first line of defence, and we want to support you in getting this right.
So let’s keep moving forward in 2025.