UK Gambling Commission Finds More Money Laundering, Promises Larger Crackdown

Posted on: December 9, 2021, 09:33h. 

Last updated on: December 9, 2021, 10:46h.

The latest Compliance and Enforcement Report by the UK Gambling Commission (UKGC) is out. The regulator said operators and other gaming-related entities still aren’t focusing enough on anti-money laundering (AML) procedures.

Andrew Rhodes
Andrew Rhodes, interim CEO of the UK Gambling Commission. The executive is reportedly close to cracking down harder on companies that violate regulations. (Image: Wikipedia)

The Compliance and Enforcement Report provides an overview of the UKGC’s casework for the last financial year and highlights areas where the industry needs to “raise standards.”

The UKGC suspended the licenses of five more operators and revoked nine personal management license holders during the 2020-2021 financial years.

More Fines Than Ever Being Given

Additionally, 15 gaming and betting businesses were fined and issued regulatory statements totaling £32.1 million (US$42.36 million), which is more than any year before.

Overall, the commission’s compliance reports identified social responsibility and AML as the major issues throughout the financial year. They also provided the primary reason for the majority of enforcement actions.

Looking back at enforcement in 2020/21, we see the same two weaknesses in almost every case – operators failing to adhere to social responsibility and anti-money laundering rules,” UKGC interim CEO Andrew Rhodes states.

The UKGC noted that there were common problems with AML requirements. Those included relying too heavily on third-party providers to perform due diligence checks, delays in customer identification checks, and a lack of methodology in risk assessments.

Additionally, some betting companies were criticized for making “vague references” to their risk assessments. For example, they cited KYC (Know Your Customer) checks, customer monitoring, or stated that crypto payments aren’t accepted, without providing additional information.

The commission also highlighted a trend in which operators have tended to prioritize commercial considerations over meeting AML and social responsibility obligations.

UKGC Losing Patience with Some Operators

The UKGC could be looking to take severe action against repeat offenders. Rhodes warned that the regulator will not tolerate “recidivist behaviors towards compliance” as operators are required to keep their licenses in good standing.

Rhodes made his remarks at GambleAware’s Annual Conference. He stated that the commission supports the conference’s “deeper collaboration to prevent gambling harms” theme. The executive added that the UKGC should, ideally, only have to focus on licensing matters, not enforcement. This isn’t possible, though, as there is “too little compliance” on the part of operators.

“Operators yield £14.1 billion (US$18.61 billion) after winnings are paid,” he explained. “That means that the industry can take £450 per second from consumers within the UK. It is unbelievable to conceive. But what is more, if we take out the National Lottery, 5% of customers account for 90% of gross gambling yield.”

The UKGC boss said that he believes that operators now view fines as a “compliance measure.” They are a penalty to be paid without further consideration. He asserted that the UKGC won’t tolerate this mentality. This is a potential hint that responses to breaches may become more severe than just financial penalties.

Rhodes concluded, “We are aware that if you introduce the wrong friction, you can drive consumers to the black market.  But we are nowhere near that. Our regulatory posture has changed because there are too many cases that make everyone blush. [This] has to stop.”

The UKGC has previously warned that stricter measures would be implemented. However, that was under a different regime that had a different approach to enforcement.