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Silvia Pavlof December 6, 2023 3 min read
UK Gambling Commission Raises Terrorist Financing Risk to Medium
The increased risk level results from the latest government document on Money Laundering and Terrorist Financing
The UK Gambling Commission (UKGC) has adjusted its assessment of terrorist financing risks within the gambling industry, upgrading the risk level from low to medium.
UK Gambling Commission Flags High ML/TF Risks in Specific Gaming Sectors
The risk level upgrade stems from the latest Money Laundering (ML) and Terrorist Financing (TF) risk assessment released by the regulatory body, marking a significant shift since the previous evaluation in 2020.
The comprehensive government document aims to outline the existing landscape of money laundering and terrorist financing threats, offering a crucial resource for the regulated gambling sector to formulate and enhance their risk frameworks. All UK-licensed operators are now mandated to ensure the effective implementation and regular updates of their policies, procedures, and controls to maintain efficacy.
Although the overall money laundering threat level in the gambling sector remains categorized as low, the report highlights variations in risk among different gaming activities. For instance, remote casino, betting, and bingo activities are deemed to have a high ML/TF risk level, in contrast to the National Lottery, which retains its low-risk classification.
One of the most notable changes in the 2023 assessment is the elevation of the overall terrorist financing risk to a medium level from the prior low classification. This shift followed a thorough re-evaluation by the UKGC in collaboration with counter-terrorism specialists.
UKGC Responds to 2020 Concerns and Identifies New Risk Factors
Within specific gaming activities, noteworthy adjustments have been made. For iGaming, the regulator has diminished the risk associated with high-value customers and VIP schemes, addressing concerns raised in the 2020 report regarding the adequacy of Know Your Customer (KYC) checks.
Additionally, the UKGC has introduced new risk considerations that were absent in the previous report. These include the evaluation of organized crime gangs posing as customers, assessed as a high-risk factor. Other newly identified risks involve the exploitation of vulnerable individuals’ gambling accounts for disrupting financial trails (mule accounts) and the failure to implement a closed-loop system.
Simultaneously, the threat level for remote betting has intensified for practices such as smurfing and peer-to-peer betting, both now classified as high-risk activities.
In response to these findings, the UKGC has launched a confidential online service for reporting criminal and suspicious activities related to gambling.
The initiative encourages individuals with information on match-fixing, underage gambling, money laundering, unlicensed gambling, and other criminal activities to come forward. Users can submit supporting documents, ensuring a comprehensive approach to reporting.