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Money laundering issue in gambiing

Betting companies engage with ‘VIP’ customers only to facilitate their further gambling, rather than to make checks on their source of funds and their welfare, according to the industry regulator.

Betting companies continue to face issues with ‘problem gamblers’ who steal to fund their gambling, and in some cases firms do not do enough to protect the consumer or tackle money laundering risks. To this extent, AML (anti money laundering) issues often overlap with safer gambling themes, according to the UK regulator the Gambling Commission in a report. Most recently in February the regulator fined William Hill plc £6.2m for ‘systemic failings’ in how the company was preventing money laundering and harm being caused to problem gamblers.

The Commission says that it has taken ‘robust action where we are of the view an operator’s AML policies, procedures and controls are not fit for purpose. Where they are not properly engaging with an individual who may be a problem gambler from an early stage there is a significant risk criminal finances are being laundered or spent through the gambling industry’. Taking a customer’s word at face value does not suffice for compliant due diligence, the report said.

The regulator said it was concerned customers whose gambling starts to escalate are only identified and their source of funds verified once an operator’s commercial triggers are hit, and often once it is too late to have picked up on the deposits of significant criminal finances. “Over the past year, we have been particularly concerned about operators’ ‘VIP customers’, those with a high spend on gambling who are not being sufficiently challenged as to their source of funds. Often, simple open-source checks can cast doubt on assertions or assurances given by such customers. We have seen repeated examples of individual, high spending customers ‘slipping through the net’.”

The regulator pointed to staff training concerns and ‘repeated instances of apparently compliant policies, procedures and controls not being put into practice’ that has led to ‘significant regulatory failings’, whether in high street shops or among senior managers. The report warned that casinos are ‘particularly at risk from those who seek to launder criminal finances’.

Neil McArthur, Chief Executive, said: “This is a call to action to the leaders of operators to set the tone from the top, to lead a culture of compliance that puts doing the right thing for your customers first, and to strive to continuously raise standards for consumers.”

For the full report visit the Gambling Commission website.


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