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The prevention of money laundering and combating the financing of terrorism

Customer relationships

3.1 Casino operators should be mindful that some risk indicators (for example, a pattern of increasing spend or spend inconsistent with apparent source of income) could be indicative of money laundering, but also equally of problem gambling, or both. There may also be patterns of play (for example, chasing losses) that appear to be indicative of problem gambling that could also be considered to indicate other risks (for example, spend that is inconsistent with the individual’s apparent legitimate income could be the proceeds of crime). While patterns of play may be one indicator of risk, casino operators should satisfy themselves that they have asked, or are prepared to ask, the necessary questions of customers when deciding whether to establish a business relationship, maintain the relationship or terminate the relationship. In summary, it is perfectly plausible that an individual attempting to spend criminal proceeds or launder money could also be a problem gambler, but one does not necessarily follow the other. The responsibility is on the operator to be in a position to understand these dynamics and mitigate any risks to the licensing objectives.

3.2 Casino operators are subject to both certain provisions of POCA, the Regulations and the Act (and the relevant licence conditions and codes of practice). Operators have the responsibility to comply with the licensing objectives and, therefore, they should carry out appropriate enquiries and assessments to ensure they do so. While the conclusions drawn and actions taken may differ according to whether money laundering and/or social responsibility risks are identified, the effective identification and management of these risks rests upon the ability of casino operators to have a comprehensive knowledge of their customer relationships and for managers to be clear on their responsibilities.

3.3 It is also important that the casino operator is able to reconcile information relating to customers’ gambling activities in different parts of the business so that they have a more complete picture of the risks posed by the activities of individual customers.

3.4 Commercial and business information should be considered for AML as well as social responsibility purposes when transacting with an individual. This should include arrangements for the monitoring of customers with whom a business relationship has been established. For example, information about customer spend can be used by the casino operator to proactively monitor high risk customers in relation to their money laundering risk.

3.5 Customer relationships need to be managed proficiently and records should be maintained as to what information was communicated to the customer, why it was communicated and what considerations were made. If players expect that customer interaction is likely should they play with large amounts of money, or for lengthy periods, and such interaction is consistently applied, there would be less reason for players to question or become suspicious of the motives of these interactions. Casino operators may find it helpful to provide their customers with a leaflet which explains why they are being asked questions about their game play.

3.6 The Commission recognises that some casino operators may find their obligations under POCA and the Regulations challenging, particularly in relation to the management of customer relationships, but it is incumbent on operators to have policies, procedures and controls in place to ensure that they comply with all relevant provisions of POCA and the Regulations (and the Act and the relevant licence conditions and codes of practice), in particular in relation to CDD, the reporting of money laundering activity by customers and the obtaining of a defence (appropriate consent) where necessary.

3.7 Customer relationships for AML purposes consist of three aspects:

  • the establishment of the business relationship with the customer, including verification of the customer’s identity to a reasonable degree
  • the monitoring of customer activity, including account deposits and withdrawals
  • the termination of the business relationship with the customer.

3.8 At all stages of the relationship it is necessary to consider whether the customer is engaging in money laundering (including criminal spend); whether there is a need to report suspicious activity or seek a defence (appropriate consent); and any risks posed to the licensing objectives.

Next chapter: Establishment of business relationship