Gambling Commission enforcement director John Pierce spoke at the Gambling Anti-Money Laundering Group Training Day on 12 February, where he outlined key insights the watchdog has found regarding AML practices.  

The Commission has encouraged operators to review customer profiles and monitoring procedures. This is to ensure customer risk profiles align with the “full range of risk” such as customer transactions, geographic location and product risk.

Pierce noted there are a number of “customer triggers” that are proving ineffective at handling money laundering and terrorist financing risks.

Highlighted by Pierce are procedures that do not “appropriately” consider a customer’s salary and wealth and thus fail to identify irregular spending.

The Commission believes operators are “over-relying” on self-declarations and open-source information with regard to money laundering and terrorist financing.

Additional missteps include allowing vast sums of money to be transacted before any customer AML review has taken place.

Operators failing to check their own information and relying solely on financial triggers is also increasing risk.

Pierce stated operators should consider “realistic and effective monetary and non-monetary thresholds” when determining if further information should be acquired from customers. Pierce explained that dialogue should be opened with users at an early stage in the customer relationship.

The Commission is of the view that operators are not following their own procedures to acquire source of funds information in the review process.

“We expect source of funds information to be requested on a risk-based approach but, where this is done, it should not be treated as a tick-box exercise,” Pierce said.

“It is key that staff are given sufficient guidance on how to review documents and identify red flags, how to verify source of funds information and how to record their decision making,”

Emerging online threats

The Commission’s enforcement director has also detailed several nascent threats that it is dealing with, including the growth of crypto and AI.

Pierce noted there has been a rise in customers using artificial intelligence to forge identification documents and source of funds information.

The watchdog has seen increased cases of “ID farming”, a practice where threat actors collect personal data to acquire bank accounts that are subsequently used to open gaming accounts.

Mule accounts, user accounts designed to launder money, have also increased, as have the levels of fraudulent activity in the betting sector.

Lastly, Pierce noted that while crypto currencies are not a new risk factor, the challenges they present continue to grow.

“As crypto currencies become more prevalent, we expect more payment providers to offer crypto payment facilities. Operators need to have a full understanding of the services provided by their payment providers,” Pierce said.

Earlier this month, the Gambling Commission reported that online gross gambling yield in Great Britain had increased 21% year-on-year during the fourth quarter of 2024 to £1.54 billion (€1.85 billion/$1.92 billion). Additionally, overall online bets and spins were up by 8% year-on-year to 25.9 billion.

This is despite the fact that average monthly active player accounts declined by 3% in the fourth quarter.