The money laundering and terrorist financing risks within the British gambling industry
12 - Bingo (Non-Remote)
|Sector||Previous overall risk rating||Current overall risk rating|
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:
- Money laundering and terrorist financing risk assessment within the British gambling industry: 2019 (PDF)
- Money laundering and terrorist financing risk assessment within the British gambling industry: 2018 (PDF)
|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) incl. 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 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 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.
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:
- operators failing to undertake KYC checks on customers
- transactions not being monitored in real time
- ‘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 COVID-19), this has been given a medium risk rating in relation to the non-remote bingo sector.
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.
Bingo (Remote) Next section