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.
7 - Casino (non-remote)
Sector Risk
Table actions:
| Sector | Previous overall risk rating | Current overall risk rating |
|---|---|---|
| Casino (non-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 | Undermining of the Money Laundering Reporting Officer (MLRO) role by senior management which can intentionally or unintentionally lead to exploitation by money launderers | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Operator control | Lack of competence of key personnel and licence holders which can then potentially be exploited by criminals seeking to launder the proceeds of crime | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Operator control | Lack of adequate and relevant due diligence checks conducted resulting in criminals laundering money | High (3) | High (3) | High (9) | No change |
| Operator control | Lack of key person in place responsible for regulatory compliance (as required under regulation 21(1) (a)) | Medium (2) | High (3) | High (6) | New risk rating |
| Operator control | Employees who do not hold a personal licence being responsible for ID checks | 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 |
| Operator control | Unlicensed casino employees with known criminal records or suspected criminal activities | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Licensing and integrity | Gambling operations being acquired by organised crime to launder criminal proceeds, or the Ultimate Beneficial Ownership is a criminal or involved in a criminal activity | Medium (2) | High (3) | High (6) | No change |
| Licensing and integrity | Employees colluding with criminals | High (3) | High (3) | High (9) | No change |
| Geographic | Customer from high-risk jurisdictions using casino facilities to launder money | Medium (2) | High (3) | High (6) | No change |
| Customer | Customers who appear on financial sanctions list laundering funds which are subject to asset freeze | Low (1) | High (3) | Medium (3) | No change |
| Customer | Foreign politically exposed persons (PEPs) using casinos to clean criminal funds | Medium (2) | High (3) | High (6) | No change |
| Customer | Domestic PEPs using casinos to clean criminal funds | Low (1) | Medium (2) | Low (2) | No change |
| Customer | False or fraudulently obtained or stolen ID docs used to bypass controls | Medium (2) | High (3) | High (6) | No change |
| Customer | Customers breaking up large amounts of cash into small transactions to minimise suspicion and evade customer due diligence (CDD) requirements at the threshold (‘smurfing’) | High (3) | High (3) | High (9) | Increase in likelihood |
| Customer | Use of third parties or agents to obscure the source or ownership of money gambled by customers and their identities | Medium (2) | High (3) | High (6) | No change |
| Means of payment | Cash transactions | High (3) | High (3) | High (9) | No change |
| Means of payment | Casinos acting as Money Service Businesses (MSBs) | High (3) | High (3) | High (9) | No change |
| Means of payment | Cryptoasset payments | Medium (2) | High (3) | High (6) | No change |
| Means of payment | Cashless payments | Medium (2) | High (3) | High (6) | New risk rating |
| Means of payment | Transfer of funds between casino customers | Medium (2) | High (3) | High (6) | No change |
| Means of payment | Scottish notes | Low (1) | High (3) | Medium (3) | New risk rating |
| Product | Bring your own devices (BYODs) | Low (1) | High (3) | Medium (3) | New risk rating |
| Product | Electronic roulette - when used with ticket in ticket out and automatic ticket redemption machines | Medium (2) | High (3) | High (6) | No change |
| Product | Gaming machines (all) | Medium (2) | High (3) | High (6) | Decrease in likelihood |
| Product | Peer to peer gaming (poker) business to customer (B2C) | High (3) | High (3) | High (6) | No change |
Case studies
Scottish notes
An individual attempted to exchange a large quantity of Scottish notes at a casino cash desk and their request was denied. They were later seen on the casino’s CCTV inserting large quantities of cash into an electronic gaming machine. The machine was later checked and found to contain several thousand pounds in Scottish notes.
2023 money laundering and risks- Casino (remote) Next section
2023 money laundering and risks - Casinos offering Money Service Businesses (MSBs)
Last updated: 15 April 2024
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