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Guidance

The money laundering and terrorist financing risks within the British gambling industry

Our money laundering and terrorist financing risk assessment: 2020

Published
18 December 2020

Last updated
25 July 2024 - Changes

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  1. Contents
  2. 12 - Bingo (Non-Remote)

12 - Bingo (Non-Remote)

Sector rating

Sector Previous overall risk rating Current overall risk rating
Bingo (Non-Remote) Medium Medium

Existing inherent risk ratings

There has been some change in the risk levels for the inherent risks for the non-remote bingo sector. For further information relating to the inherent risks (including vulnerabilities, consequences and controls), see our previous risk assessments:

Vulnerability Risk Previous likelihood of event occurring Previous impact of event occurring Current likelihood of event occurring Current impact of event occurring Change in risk
Operator Control Operators failing to comply with prevention of money laundering and terrorist financing legislation and guidance Medium Medium Medium Medium No change
Operator Control Removal of membership schemes Medium Medium Low Medium Decrease
Operator Control Lack of or inadequate ‘know your customer’ (KYC) checks conducted resulting in criminals laundering criminal proceeds Medium Medium Medium Medium No change
Licensing & Integrity Gambling operations being acquired by organised crime to launder criminal proceeds Medium Medium Low Medium Decrease
Licensing & Integrity Employees colluding with criminals Medium Medium Low Medium Decrease
Customer Anonymous customers laundering proceeds of crime through gaming machines Medium Medium Low Medium Decrease
Means of Payment Ticket-in-ticket-out (TITO) facilities used to launder funds when used in conjunction with ATR machines Medium Medium Medium Medium No change
Product Electronic Betting Terminals (EBTs) including table-top gaming (either traditionally or via EBT content) Low Medium Low Medium No change
Product Gaming Machines, Cat B3 Medium Medium Low Medium Decrease

Additional inherent risks

Cash payments

Cash is globally recognised as being attractive for money launderers because of its anonymity, being difficult to trace and it is easily transferrable. The Financial Action Task Force (FATF) recognises that cash is widely used in the criminal economy25. The vulnerability associated with cash transactions include; criminal lifestyle spending, use of Scottish and Irish notes, and fraudulent notes and coins. However, the shift to cashless payment due to coronavirus (COVID-19) mitigates the risks associated with cash payments to a certain extent. This has been given a medium risk rating in relation to the non-remote bingo sector26.

Cashless payment

As discussed previously, the use of cashless payments in general has increased in popularity in recent years. This presents a risk where Money Laundering (ML) could be facilitated using fraudulently obtained and stolen cards. Whilst there are controls in place through closed loop systems, this mitigation is wholly reliant on the operator and its employees effective application and there is a monetary cap on each transaction (currently £45).

The associated risks with cashless payment include:

  1. operators failing to undertake KYC checks on customers
  2. transactions not being monitored in real time
  3. ‘smurfing’: a common ML method where a customer will make numerous low level transactions to avoid suspicion.

The above risks associated with cashless payments further increase where a customer uses multiple premises and there is a lack of customer interaction. Due to cashless payments increasing in popularity (especially due to coronavirus), this has been given a medium risk rating in relation to the non-remote bingo sector.

References

25 FATF Report: Money Laundering through the physical transportation of cash’ (PDF opens in new tab) (accessed 27th July 2020, updated October 2015).

26 Licence Condition 5.1.1. of the LCCP (cash handling) places AML obligations on operators around the use of cash and cash equivalents by customers designed to minimise the risk of crimes such as money laundering.

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