Operators Warned Customers Could Use AI to Pass Due Diligence
The UK’s Gambling Commission (UKGC) has issued operators with a warning over the growing risks posed by artificial intelligence (AI)
AI is becoming a challenge for UKGC. © DeltaWorks, Pixabay
Key Facts:
- AI is having a transformative impact on many UK sectors
- UKGC says customers could use AI tools to pass the due diligence tests posed by online gambling operators
- Companies have been told to be on alert for this use of AI
- UKGC also warns of growing crypto money laundering risks
Money laundering remains a high concern for UKGC, which has been charged with leading an overhaul of the country’s online gambling regulations.
Due diligence checks are in place at betting operators, but UKGC believes AI can now be used to pass them.
In an update posted to the official Gambling Commission website, the body said AI programs and software are becoming much more sophisticated.
It noted how the National Crime Agency (NCA) recently detailed how accounts successfully created using AI are more likely to be used for criminality, including money laundering.
Financing terrorism is also one of the outcomes of this growing use of AI, UKGC said.
Consider All Information
UKGC gave operators details of what they must do to combat the new AI threats.
It said in a statement: “Operators must consider all information they hold on a customer and, where documents are received from a customer, must ensure that these documents are appropriately scrutinised.
“Operators need to ensure their staff are appropriately trained to assess customer documentation, including how to identify false and AI-generated documents.”
False documentation can be used to pass due diligence checks, according to UKGC, which said deepfake videos and face swap images and videos could also be used.
Open-Loop Payment Processes
UKGC noted how open-loop payment systems can be exploited in a further warning about the risks of online betting sites being used for money laundering.
This refers to allowing a customer to use one type of payment method to deposit funds, such as a debit card, but then withdraw winnings via an alternative method, like an e-Wallet.
Many online operators now have a closed-loop system where customers need to withdraw using the same method they added funds with, but not all sites use this.
UKGC described a lack of closed-loop payment systems as “high risk” and noted these seem to be particularly common with non-remote betting operators.
It said in its update: “Closed-loop systems are considered best practice and mean operators process customer withdrawals and winnings to the same payment method that was used for the deposit.”
“Where operators do not have a closed-loop system in place, there is a significant risk of criminals being able to use the business to launder money. Therefore, it is strongly recommended that gambling operators operate a closed-loop payment system.”
UKGC added that firms operating an open-loop payment system would have to include this risk within their money laundering and terrorist financing risk assessments.
