Guidance
The 2023 money laundering and terrorist financing risks within the British gambling industry
The Gambling Commission's money laundering and terrorist financing risk assessment for the British gambling industry in 2023.
9 - Betting (remote)
Sector Risk
| Sector | Previous overall risk rating | Current overall risk rating |
|---|---|---|
| Betting (remote) | High | High |
For further information relating to the inherent risks (including vulnerabilities, consequences and controls), see our previous 2020 risk assessment.
Inherent Risk
| Vulnerability | Risk | Current likelihood of event occurring | Current impact of event occurring | Overall risk | Change in risk |
|---|---|---|---|---|---|
| Operator control | Operators failing to comply with prevention of money laundering and terrorist financing legislation and guidance | High (3) | High (3) | High (9) | No change |
| Operator control | Operators staking and winning directly and indirectly on their own products | Low (1) | Medium (2) | Low (2) | No change |
| Operator control | Lack of competence of key personnel and licence holders which can then be exploited by criminals seeking to launder the proceeds of crime | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Operator control | Inadequate or lack of ‘know your customer’ (KYC) checks resulting in criminals laundering criminal proceeds or risk of this occurring | High (3) | High (3) | High (9) | No change |
| Operator control | ‘High value’ customer schemes | Medium (2) | High (3) | High (6) | No change |
| Operator control | High monetary thresholds | High (3) | High (3) | High (9) | New risk rating |
| Operator control | KYC completed at the point of withdrawal | Medium (2) | High (3) | High (6) | New risk rating |
| Operator control | Third party business relationships and business investors | Medium (2) | High (3) | High (6) | New risk rating |
| Licensing and integrity | Gambling operations run or acquired by organised criminals to launder criminally derived funds | Low (1) | High (3) | Medium (3) | Decrease in likelihood |
| Licensing and integrity | White label providers | High (3) | High (3) | High (9) | No change |
| Customer | False or stolen documentation used to bypass controls to launder criminally derived funds | High (3) | High (3) | High (9) | No change |
| Customer | Accessibility to multiple remote accounts | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Customer | Customers from high risk or non-cooperative jurisdictions using remote facilities to launder criminally derived funds | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Customer | Customers who appear on international financial sanctions lists laundering criminal funds | Low (1) | High (3) | Medium (3) | No change | Customer | ‘Smurfing’ | High (3) | High (3) | High (9) | Increase in risk | Customer | ‘Mule’ betting accounts | High (3) | High (3) | High (9) | No change | Customer | Politically exposed persons (PEPs) | Medium (2) | High (3) | High (6) | New risk rating | Customer | Business customers (betting exchange) | Medium (2) | High (3) | High (9) | New risk rating |
| Customer | Use of third parties or agents to obscure the source or ownership of money gambled by customers and their identities | High (3) | High (3) | High (9) | No change |
| Means of payment | E-wallets | Medium (2) | Medium (2) | Medium (4) | No change |
| Means of payment | Cryptoasset transactions | Medium (2) | High (3) | High (6) | No change |
| Means of payment | Pre-paid cards | High (3) | High (3) | High (9) | No change |
| Means of payment | Lack of ‘closed loop’ system | Medium (2) | High (3) | High (6) | New risk rating |
| Means of payment | Multiple methods of payment | Medium (2) | High (3) | High (6) | New risk |
| Product | Peer to peer betting | High (3) | High (3) | High (9) | Increase score |
| Product | Unregulated betting events | Medium (2) | High (3) | High (6) | New risk rating |
Case studies
Mule accounts
A student with no formal employment was asked for source of funds information by an operator as part of Know your customer (KYC) checks. The student provided a bank statement which showed them making large cash deposits into their bank account, which was followed by smaller transfers to other individuals with the payment references naming other gambling operators.
Smurfing
An individual was identified as having made regular deposits in relatively low increments, which were then placed on low-risk bets with an almost guaranteed return. The customer attempted to withdraw using an e-wallet and was asked for evidence that they were the legitimate owner of the wallet. At this point, the individual confirmed their e-wallet account had been closed.
2023 money laundering and risks - Casinos offering Money Service Businesses (MSBs) Next section
2023 money laundering and risks - Betting (non-remote)
Last updated: 15 April 2024
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