Guidance
The money laundering and terrorist financing risks within the British gambling industry
Our money laundering and terrorist financing risk assessment: 2020
14 - Society Lotteries and External Lottery Managers (Remote and Non-Remote)
Sector rating
| Sector | Previous overall risk rating | Current overall risk rating |
|---|---|---|
| Society Lotteries (Remote and Non-Remote) | Low | Low |
| External Lottery Managers (Remote and Non-Remote) | N/A: Not assessed previously | Low |
Society lotteries and The National Lottery are being assessed separately for the purposes of this publication as they are two separate sectors and the risks posed in both differ. External Lottery Managers (ELMs) are being assessed for the first time as part of this risk assessment.
Existing inherent risk rating
The inherent risk ratings have changed for this assessment. There has been some change in the risk levels for the inherent risks for the arcade sector. For further information relating to the inherent risks (including vulnerabilities, consequences and controls), See our 2019 publication: Money laundering and terrorist financing risk assessment within the British gambling industry: 2019 (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 | Low | Low | Medium | Low | Increase |
| Licensing and integrity | Operator being acquired by organised crime to launder criminal funds | Low | Medium | Low | Low | Decrease | Customer | Anonymous customers (non-remote) | Medium | Very Low | Low | Very Low | Decrease | Customer | False and stolen identity documentation | Low | Low | Low | Low | no change |
| Customer | Customer not physically present (remote) | Low | Low | Low | Low | No change |
| Products | Scratch cards/interactive instant win games | Low | Very Low | Low | Very Low | no change |
| Means of Payment | Cash transactions (non-remote only) | Low | Medium | Low | Low | Decrease |
NB: previous overall risk ratings and the section in the table above relating to ‘movement’ are not applicable to ELMs as this is the first time this sector is being assessed separately.
New emerging risks (applicable to ELM sector only)
Failure to transfer lottery proceeds
ELMs make arrangement for a lottery on behalf of a society. The potential Money Laundering (ML) and Terrorist Financing (TF) risks are that lottery proceeds might not be passed on by the ELM to the society lottery they are working on behalf of, however some of these risks are partially mitigated as ELMs are required to be licensed by the Commission and by the scrutiny the society will implement for lottery proceeds between itself and the ELM. As there is no widespread evidence of this occurring, this has been given an overall low risk rating with a further update to be provided in the next risk assessment.
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National Lottery (Remote and Non-Remote)
Last updated: 15 April 2024
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