Raising Standards for consumers - Compliance and Enforcement report 2020 to 2021
Further to compliance and enforcement activity, in land-based casinos we found the following areas of concern relating to Money Laundering and Terrorist Financing:
- a customer attempting to present sealed cash packets that the customer stated was from another casino operator. On enquiry, this was not substantiated.
- a customer deposited £20,000 of cash on two occasions and was later found to have provided false identification.
- a customer from a high-risk jurisdiction and belonging to an organised criminal gang used money from cyber-crime in a high-end casino.
- a casino’s policy was to ask for source of funds after a customer had visited the casino 20 times.
- a temporary customer attempted to exchange substantial amounts of Swiss Francs and Euros but refused to provide source of funds. (Currency exchange services can present an attractive target for money launderers.)
Online licensees’ compliance and enforcement activity revealed:
- an organised criminal gang targeted at least 28 online operators (including casinos) using various identities (possible ‘mule’ account activity) with significant amounts being deposited e.g., a deposit of £574,675.01 was accepted by one online betting operator.
- a customer from a high risk third country was found with pre-paid cards under 36 different identities. Some of these were linked to gambling activities with online betting operators.
- in relation to one betting operator, 4218 customers were identified as not having passed appropriate ‘KYC’ checks.
- a financial advisor stole nearly £15million from wealthy clients to fund his gambling addiction with multiple operators.
- a customer deposited more than £100,000 and lost more than £65,000 in seven days. It was known that the customer had a salaried income of less than £20,000 but the customer had not provided appropriate source of funds or source of wealth checks.
- an operator had not properly risk profiled customers from the outset of the business relationship and was instead relying solely on financial triggers to manage AML risks.
- operators continued to accept, without independent verification or any challenge, customers’ assertions that funds were recycled winnings without consideration of the risks of money laundering.
- similarly, overly redacted bank statements were accepted as sufficient evidence from customers. In one instance, a customer lost over £190,000 during February- august 2020 having deposited over £400,000 believed to be recycled winnings. The account was eventually closed due to insufficient evidence of source of funds.
- SARs being filtered through team leaders instead of being sent directly to the MLRO.
A compliance assessment with an online casino operator identified the following good practice:
- newly registered customer had their account blocked when they reached total deposits of £250 on the day of account opening
- information was requested to build a customer profile and the account remained blocked until the information was provided
- the customer provided basic occupation and salary information
- using the information provided, a monthly net loss limit was placed on the account which factored in discretionary income
- a positive customer interaction was conducted, and the account was reopened
- the customer repeatedly asked for their monthly net loss limit to be increased, the operator identified this as a marker of harm and suspended the account until an interaction could take place
- the account will not be reopened until a successful interaction is conducted.
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Last updated: 8 December 2021
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