Italy Tightens Grip on Gambling Firms amid Concerns About Money Laundering

The global gambling industry is frequently used as a front for different unlawful activities such as money laundering for example. Despite the efforts of the operators, casinos, online gambling platforms and betting providers can fall victim to such illicit activities.

Considering that gambling operators deal with significant sums, they are obligated to comply with different know-your-customer (KYC) and anti-money laundering (AML) regulations. Despite the stringent regulations in jurisdictions across the globe, culprits may still attempt to use the sector to move or launder ill-gained funds.

Decrease in Suspicious Activity Reports Raises Red Flag

Now, a newly released report reveals that the efforts against money laundering and other financial crimes in Italy are intensifying, amid a concerning decrease in suspicious activity reports (SARs) from gambling operators in the country. As announced by AML Intelligence, the country’s Financial Intelligence Unit (FIU) dedicated additional efforts to combat financial crimes within the gambling sector, including money laundering and other unlawful activities, amid growing concerns raised by the decrease in SARs.

Through increased monitoring, effective collaboration with the operators and enhanced AML and counter terrorism financing (CTF) policies, the Unit seeks to prevent criminal organizations from using the gambling sector as a way to conceal their unlawfully obtained funds. As noted, the action comes after a notable decrease in SARs, suggesting that unlawful organizations may use the gambling sector to launder proceeds or for other illicit activities.

The additional efforts of the FIU require gambling companies and operators to strengthen their KYC, AML and CTF regulations. Such operators are also encouraged to be vigilant and report suspected transactions.

Companies that fail to complete the additional requirements or neglect their financial obligations can be subject to tough enforcement actions. Such can include fines, additional license conditions or even revocation. Non-compliance with the stringent regulations can also result in prosecution against operators that have willfully engaged in unlawful activities.

Proactive Actions Can Help in the Fight Against Financial Crimes

The latest announcement doesn’t come as a surprise, considering the size of the gambling industry in Italy. Currently, the country has the second-largest gambling sector on the Old Continent with only the United Kingdom having a larger market in size.

Additionally, this isn’t the first time a financial regulatory body encouraged the country to enhance its AML regulations for the gambling industry. The global group that focuses on combatting money laundering and terrorism financing, the Financial Action Task Force (FATF), has previously asked Italy to bolster its AML and CTF regulations to withstand financial crimes effectively, as well as investigate and punish bad actors.

Needless to say, while such additional financial scrutiny may be seen as a burden to the gambling operators, it is also playing a key role in protecting them. After all, it is better to enforce proactive enhanced protection than to mitigate the negative impact of non-compliance.