Former U.K. Gambling Commission investigator on AML/CFT regulations

Given my own background as a former investigator for the commission, it’s a good opportunity to explain more about this regulator’s important work. This also includes its role in helping to tackle money laundering and terrorism financing.

Issuing licenses

The commission regulates the U.K. gambling sector, including the national lottery. It regulates the activities of all gambling companies who offer services to U.K. consumers, including physical and digital casinos. It is managed by the U.K.’s Department for Digital, Culture, Media, and Sport.

The commission issues licenses to gambling operators and individuals with key positions within the sector, and sets standards that govern the activities of gambling firms and key individuals.

These standards take the form of the Licensing Conditions and Codes of Practice, which discuss anti-money launder and countering the financing of terrorism (AML/CFT) regulations, along with measures for operators based in foreign jurisdictions.

The commission monitors gambling operators’ compliance with the standards through compliance assessments. Any compliance assessments completed that raise questions regarding the conduct of gambling operators are referred to the enforcement team. The enforcement team carries out investigations to determine whether the operator has breached any licensing conditions. The commission has the power to issue regulatory actions, including the revocation or suspension of operating licenses and financial penalties.

In March 2023, the commission issued its largest fine to date of 19.2 million pounds (U.S. $23.7 million) against William Hill Group for social responsibility and AML failures.

Several customers were allowed to deposit large amounts without appropriate checks, with patron spending and losing 70,000 pounds (U.S. $86,000) in one month. Other deficiencies identified included insufficient AML training and policies, procedures, and controls lacking guidance on appropriate actions in regards to customer profiling.

The commission’s enforcement team also carries out criminal investigations into illegal gambling activity that is contrary to the Gambling Act of 2005 and liaises with law enforcement, the HM Revenue and Customs, and the National Crime Agency to coordinate investigations.

Strategic objectives

The commission aims to protect gambling customers and keep crime, including money laundering and terrorist financing, out of gambling. Its strategic objectives are to:

• Protect children and vulnerable people from being harmed by gambling;
• Achieve a fairer market with more informed customers;
• Keep crime out of gambling;
• Optimize returns to good causes from the national lottery; and
• Improve gambling regulation.

Money launderers can utilize gambling activity in order to place and layer their ill-gotten gains within the financial sector. Splitting transactions into small amounts, opening multiple gambling accounts or accounts under false identities, and depositing and withdrawing money after minimal gambling activity are all methods used in the laundering process.

The commission has a responsibility to ensure the gambling industry has effective policies, procedures, and controls to mitigate AML/CFT risks, underpinned by completing a money laundering and terrorist financing risk assessment.

The International Compliance Association is a sister company to Compliance Week. Both organizations are under the umbrella of Wilmington plc.