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The Gambling Commission has conducted a ‘thematic review’ which has reportedly revealed shortcomings in anti-money laundering controls. Early this year, the Gambling Commission wrote to all 195 UK-based remote casino operators with summary findings. 17 firms are under investigation and five operators are at risk of losing their licence. The early findings pointed to inadequacies in risk assessment exercises, a lack of ongoing monitoring, limited staff training and SARs containing insufficient information. In short, remote casinos are not doing enough to prevent or detect the mis-use of their services to launder criminal proceeds or fund terrorism.
UK authorities have highlighted various reasons why casinos are an attractive option to criminals, including:
- Attempts by organised criminals to acquire or control casinos as laundering vehicles
- Coercion of casino employees
- Ability to deposit large volumes of cash
- Lack of familiarity between the casino and the customer; and
- The ability to exchange chips between customers.
Through suspicious activity reports, the NCA identified that a drug trafficking group had managed to deposit £1.8m into a betting account over a number of years, which might not have been possible if the operator had been aware of the source of funds. The Gambling Commission’s latest guidance for remote and non-remote casinos notes that information on customers’ source of funds and legitimate income levels can assist with assessing risk and determining behaviour that might warrant further enquiry.
Laundering through casinos is far from just a UK issue. A casino in the state of California has been fined $8m for repeat violations of US anti-money laundering laws. The Government of British Columbia is undertaking a full review of the AML policies in place at casinos following reports of large suspicious cash transactions, including one of almost $13.5m in $20 bills said to be “unsourced cash from unknown persons”. In July 2017, casinos were brought within the scope of the Philippine Anti-Money Laundering Act, following reports that funds from the Bangladesh Bank heist were routed through local casinos.
Facing demand from organised criminals and increasingly powerful and active regulators, casino operators can increase the odds of a ‘house win’ by investing in and embedding appropriate compliance policies and procedures. This could also help reverse the trend of banks limiting or withdrawing Casino operators having suffered from ‘de-risking’ by banks; Demonstrating control of these risks could also help casinos be more attractive customers to banks.
Bovill has the expertise to help, whether it’s by designing a compliance framework, undertaking a risk assessment exercise, providing bespoke training or supporting with a regulatory visit.
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