The 2023 money laundering and terrorist financing risks within the British gambling industry
1 - Executive summary
The Gambling Commission’s Money Laundering (ML) and Terrorist Financing (TF) risk assessment 2023 presents the key risks associated with each of the sectors and encompasses licensed land-based and remote activity in Great Britain’s gambling industry. This assessment builds on the previous 2020 risk assessment and, among other things, fulfils the requirements under Regulation 17 (1) of the Money Laundering and Terrorist Financing and Transfer of Funds (Information on the Payer) 2017 (the Regulations) (opens PDF).
The purpose of this risk assessment is to:
- provide a resource for the industry in informing their own ML and TF risk assessments
- provide the Commission’s support to HM Treasury’s National Risk Assessment
- inform and prioritise our licensing, compliance, and enforcement activity to raise standards in the industry and meet our duties under regulation 46(2)(c) of the Regulations (namely, base the frequency and intensity of our on-site and off-site supervision on the risk profiles prepared under regulation 17(4)) (opens new tab).
The Commission has considered a wealth of information and intelligence when assessing the key threats identified within the British gambling industry and provides revised risk ratings in this publication. In consultation with in-house and external subject-matter experts, this assessment has been developed with input from a wide range of sector and industry specialists, including law enforcement and the National Crime Agency (NCA). It also considered approaches taken by other Anti Money Laundering (AML) supervisory authorities.
The reporting period this assessment is based on is 1 June 2020 to 31 March 2023. The methodology used to assess the risks in Great Britain’s gambling industry has been developed from the previous risk assessment in 2020. For more detail on the methodology and terminology used, please refer to the methodology section of this report.
The following gambling sectors are assessed separately (compared to previous risk assessments), as they are separate and distinct sectors with differing risk areas and levels:
- remote betting
- remote bingo
- the National Lottery (remote and non-remote)
- society lotteries and external lottery managers (remote and non-remote)
- gambling software (remote and non-remote)
- gaming machine technical (remote and non-remote).
|Current overall risk rating
|Casino, betting and bingo (remote)
|Betting (non-remote, off-course)
|Betting (non-remote, on-course)
|Adult Gaming Centres (AGCs)
|Family Entertainment Centres (FECs)
|Society lotteries and external lottery managers (remote and non-remote
|The National Lottery (remote and non-remote)
|Gambling software (remote and non-remote)
|Gaming machine technical (remote and non-remote)
In the HM Treasury and Home Office National Risk Assessment, the gambling sector is rated as low risk. However, the National Risk Assessment captures the relative risk of ML and TF occurring across all regulated financial sectors and Designated Non-Financial Businesses and Professionals (DNFBPs), which includes:
- banks and credit institutions
- money service Businesses
- legal services
- high value dealers
- accountancy and many other regulated financial services.
When the vulnerability of gambling to ML and TF is considered in the context of those other sectors in the National Risk Assessment it is currently lower risk in relative terms. By contrast, the Commission’s risk assessment compares the ML and TF risks in individual gambling sub-sectors and rates them appropriately in comparison to each other, rating them high to low risk.
When compiling the National Risk Assessment, the Treasury and Home Office are required to ensure that the risk assessment is used to consider whether providers of gambling services other than casinos should continue to be excluded from the requirements of the Regulations. It is therefore imperative that the Commission and gambling operators sustain their efforts and remain on guard to the financial crime risks inherent in gambling.
In line with Licence Condition 12.1.1, gambling operators are required and must ensure that such policies, procedures and controls are implemented effectively, kept under review, revised appropriately to ensure that they remain effective, and take into account any applicable learning or guidelines published by the Gambling Commission from time to time.
Whilst some of the ratings have changed in individual sub-sector risk areas, the overall risk ratings for each gambling sector have not changed since the previous risk assessment.
|Current overall risk rating
The impact of terrorist financing has increased from Low to High.
The assessment of the terrorist financing risk is partially based on information from the National Risk Assessment, which has assessed this area as low risk for gambling. The Commission has also collaborated closely with external stakeholders, such as the UK’s counter terrorism teams, when arriving at its risk rating to assist our understanding of the terrorist financing typologies and vulnerabilities that are applicable to the gambling industry.
This document is intended to act as a valuable resource for the industry in informing their own ML and TF risk assessments, and must be taken into account when doing so, as required under Licence Condition 12 of the Licence Conditions and Codes of Practice (LCCP)1.
It is mandatory for gambling operators from all gambling sectors to comply with the licensing objective of keeping crime and its proceeds out of gambling, as set out in the Gambling Act 2005 (the Act) (opens new tab) and the Commission’s LCCP. Furthermore, all gambling operators have legal duties under the Proceeds of Crime Act 2002 (POCA)and the Terrorism Act 2000 (TACT) (opens in a new tab) to mitigate financial crime. Casinos (both land-based and remote) have an enhanced set of legal responsibilities, as they must comply with the Regulations for casino gaming, gaming machines and any money service business activities offered2.
However, it is imperative for all gambling operators (regardless of gambling sector) to ensure they have effective risk assessments identifying ML and TF risks, and robust policies, procedures and controls in place to prevent money laundering and terrorist financing, and to continue to raise standards in these areas.
1 Licence Condition 12 requires that operators have appropriate policies, procedures and controls to prevent money laundering and terrorist financing and that such policies, procedures and controls take into account any applicable learning or guidelines published by the Gambling Commission.
2 This refers to the Regulations under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (opens in new tab) ('the Regulations') which are applicable to firms under the 'regulated sector'. Casinos are part of the 'regulated sector'.
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2023 money laundering and risks - Introduction
Last updated: 15 December 2023
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