Former UK Gambling Commission investigator into anti-money laundering and counter-terrorist financing regulation | Article

Given my personal experience as a former Commission investigator, this is a good opportunity to explain in more detail the important work of this regulator. This also includes its role in combating money laundering and terrorist financing.

Licensing

The Commission regulates the UK gambling sector, including the National Lottery. It regulates the activities of all gambling companies that offer services to UK consumers, including land-based and digital casinos. It is managed by the UK Department for Digital, Culture, Media and Sport.

The commission issues licenses to gambling operators and individuals holding key positions within the sector, and establishes standards that govern the activities of gambling companies and key individuals.

These standards take the form of licensing conditions and codes of practice, which address anti-money laundering and counter-terrorist financing (AML/CFT) regulations, as well as measures for operators based in foreign jurisdictions.

The Commission monitors gambling operators’ compliance with standards through compliance assessments. Any compliance assessments conducted that raise concerns about the conduct of gambling operators are referred to the Enforcement Team. The Enforcement Team conducts investigations to determine whether the operator has breached the licence conditions. The Commission has the power to take regulatory action, including the revocation or suspension of operating licences and financial penalties.

In March 2023, the commission imposed its largest fine to date, £19.2 million ($23.7 million), on William Hill Group for corporate social responsibility and anti-money laundering failures.

Several customers were allowed to deposit large sums without proper verification, resulting in expenditure and losses of £70,000 (US$86,000) in one month. Other deficiencies identified included inadequate anti-money laundering training, and policies, procedures and controls that lacked guidance on appropriate steps to take in relation to customer profiling.

The Commission’s enforcement team also conducts criminal investigations into illegal gambling activities contrary to the Gambling Act 2005 and liaises with law enforcement, HM Revenue and Customs and the National Crime Agency to coordinate investigations.

Strategic targets

The Commission aims to protect gambling customers and prevent crime, including money laundering and terrorist financing, from developing in gambling. Its strategic objectives are:

• Protecting children and vulnerable people from harm caused by gambling;
• Achieving a fairer market with more informed customers;
• Keep crime out of the game;
• Maximize returns to good causes from the national lottery; and
• Improve the regulation of gambling.

Money launderers can use gambling to place and distribute their ill-gotten gains in 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 is responsible for ensuring that the gaming sector has effective policies, procedures and controls to mitigate AML/CFT risks, based on an assessment of money laundering and terrorist financing risks.

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