The UK Gambling Commission has published an update on emerging money laundering and terrorist financing risks, highlighting concerns related to artificial intelligence (AI), cryptocurrencies, and certain casino practices.
In its 8 April update to anti-money laundering (AML) and counter-terrorist financing guidance, the Commission noted that both remote and land-based casinos may be inadvertently facilitating unlicensed money service business (MSB) activities. These include services such as foreign currency exchange, third-party cheque cashing, and money transfers through intermediaries.
The regulator also flagged the use of large-denomination foreign currency notes, including €500 bills, which are considered high risk due to their potential use in money laundering.
Another concern raised involves the reported use of personal data for the creation of illicit accounts, potentially operated by unlicensed betting intermediaries. The Commission noted that instances of individuals being paid to provide their personal details have come to its attention.
AI-Generated Materials and Crypto Transactions
The Commission expressed growing concern about the use of AI tools to circumvent identity verification and due diligence processes. According to the regulator, AI is increasingly being used to produce fraudulent documentation, deepfake videos, and face-swap images, which could be used to launder money through gambling platforms. Operators are expected to train staff to recognize and assess the authenticity of customer documentation.
Cryptocurrencies and associated assets were also identified as high-risk areas for potential money laundering. The Commission advised operators to monitor transactions carefully, especially in light of reports of cryptocurrency thefts being laundered through gambling channels. It also referenced the popularity of crash games—fast-paced betting games common in some unlicensed crypto casinos—as an area of interest. The Commission stated these games may allow users to engage in suspicious cash-outs with limited gameplay, potentially bypassing standard transaction monitoring.
Operators are being encouraged to implement systems that can detect suspicious patterns specific to crash game wagering.
Black Market Concerns and Supplier Oversight
The regulator reiterated concerns about licensed software being used on unlicensed gambling websites operating in the UK. Operators are reminded to ensure that their third-party suppliers are not associated with illegal markets. If such links are identified, operators are required to terminate those partnerships and report the actions taken to the Commission.
In a previous webinar, Gambling Commission CEO Andrew Rhodes commented on the risks of engaging with suppliers that also support unlicensed markets, noting that such relationships undermine the integrity of the licensed sector.
Regulatory Expectations for Operators
The Commission continues to emphasize that licensed operators are obligated to conduct thorough AML and terrorist financing risk assessments and to implement effective controls. These should be reviewed on a regular basis. Customers engaging in MSB functions should be classified as high risk and be subject to enhanced due diligence procedures.
Additionally, land-based operators are advised to use closed-loop payment systems. The regulator has identified that some continue to use open-loop systems, which allow for the movement of funds across various payment methods and pose known money laundering risks.
In March, the Commission issued penalties to two operators for AML and customer protection failures: The Football Pools was fined £375,000, and Corbett Bookmakers received a penalty of £686,070.
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