On 26 June 2019, the Gambling Commission (The “Commission”) published its money laundering and terrorist financing risk assessment for 2018 (the “Report”). The Report covers the period from 1 November 2017 to 31 October 2018 and highlights the inherent and emerging risks in each of the British gambling industry sectors.
Under Regulation 17 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the “2017 Regulations”), a supervisory authority must carry out a risk assessment of their supervised sector.
Under the 2017 Regulations, within the gambling sector, only casinos are in fact subject to the obligations in the 2017 Regulations and the statutory obligation under Regulation 17 on the Commission as the designated supervisory authority extends to producing a risk assessment only in respect of casinos. However, given the broader regulatory context of the Commission, including the licensing objective of preventing gambling from being a source of or being associated with crime or disorder, the Commission has chosen to extend its analysis in the Report to the entire gambling sector. Gambling operators – whether casinos or otherwise – all have a variety of anti-money laundering obligations under the Commission’s Licence conditions and codes of practice which makes this analysis relevant to them.
The Report intends to inform the Government of the level of risk of money laundering and terrorist funding (“ML/TF”) within the entire gambling industry in Britain. However, more importantly for operators, the Report is intended to inform the industry in relation to their own ML/TF risk assessments and prioritise the Commission’s compliance activities.
The takeaway from this Report is that overall risk ratings for each gambling sector have not changed from the last assessment published in March 2018. However, terrorist financing has been assessed independently for the first time and has been given an overall risk rating of “Medium”. The breakdown of the individual ratings can be found below:
The Commission’s Report highlights the core risks associated with ML/TF across each of the gambling industry sectors and the threats these pose to the UK’s national security, economy and international standing. The Commission stresses that the threats facing the gambling industry are diverse, complex and are steeply evolving. The Report is a valuable industry resource that can help inform operators in their own risk assessments whilst ensuring that they are aware of the vulnerabilities which exist. This will allow operators to maintain, and update where necessary, their anti-money laundering policies and procedures to meet these evolving risks.