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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
14 June 2024 - Changes

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  1. Contents
  2. 11 - Bingo (Remote)

11 - Bingo (Remote)

Sector rating

Sector Previous overall risk rating Current overall risk rating
Bingo (Remote) High High

The remote bingo and betting sector will be assessed separately for the purposes of this publication as the risks differ for both sectors.

Existing inherent risks

There has been an increase in the risk levels for some of the inherent risks for the 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 High High High High No change
Operator Control Operators staking and winning directly and indirectly on their own products Medium Medium Low Medium Decrease
Licensing and integrity Gambling operations run by organised criminals to launder criminally derived funds Medium High Low High Decrease
Customer Customer not physically present for identification Medium High High High Increase
Customer False or stolen documentation used to bypass controls to launder criminally derived funds Medium High Medium High No change
Customer Accessibility to multiple remote accounts High High High High No change
Means of payment Cryptoasset transactions Medium Medium Medium High Increase
Means of payment Pre-paid cards Medium Medium High High Increase
Means of payment E-wallets N/A (no risk rating provided in previous risk assessment) N/A (no risk rating provided in previous risk assessment) Medium Medium N/A

The following additional inherent and new emerging risks all highlight the importance of operators conducting sufficient due diligence checks on customers and have all been given a high risk rating due to potential for significant monies to be laundered online.

Additional inherent risks

Poor source of funds checks

There is evidence of instances where customers have used stolen or fraudulently obtained money for gambling with remote bingo operators. Operators need to ensure that they have robust policies and procedures in place to establish source of funds. This has been given a high risk rating.

Smurfing

‘Smurfing’ is a common money laundering method where money launderers break up large amounts of illicit money into smaller transactions to evade suspicion. There is evidence that this has been occurring in the remote bingo sector and has been given a high risk rating due to the potential monies that can be laundered if due diligence checks are not carried out by operators. .

Customers on the sanctions list

The Commission has become aware of isolated instances where remote bingo operators have had customers that have been on a sanctions list, although the sanctioned individual did not deposit monies. Operators must be vigilant in identifying customers who appear on relevant sanction lists and if breaches have occurred report this to the Commission and the Office of Financial Sanctions Implementation (OFSI). They must prevent financial transactions and report suspicions of Money Laundering (ML) and Terrorist Financing (TF) to the UK Financial Intelligence Unit. This has been rated as low risk .

Inadequate/lack of ‘know your customer’ (KYC) checks

There is evidence that remote bingo operators are failing to undertake sufficient KYC checks which can result in operators accepting illicit funds. Failure to undertake adequate affordability checks, including knowledge of customers’ occupations and delayed identification checks, i.e. at the point of withdrawing winnings, all contribute towards illicit finance washing through gambling accounts online. This is viewed as a high risk area.

New emerging risks

Use of third parties or agents to obscure the source or ownership of money gambled by customers and their identities

There have been examples in the remote bingo sector of customers’ gambling being funded by third parties which has facilitated money laundering. This highlights the importance of operators having a robust money laundering and terrorist financing risk assessment in place to mitigate such risks. This has been given a medium risk rating.

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Bingo (Non-Remote)
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