AML and Terrorism Threat Awareness Promoted by the UKGC
The UKGC has highlighted AML (anti-money laundering) and terrorism as key threats.
Key Facts:
- The Gambling Anti-Money Laundering Group Training Day took place recently
- A speaker discussed trends the UKGC has discovered regarding AML practices
- Operators should look at customers’ data more closely to detect signs of wrongdoing
On February 12th, the Gambling Anti-Money Laundering Group Training Day took place. At this event, a representative of the United Kingdom Gambling Commission (UKGC) spoke about current trends regarding anti-money laundering (AML) practices as well as new threats operators face.
John Pierce, the UKGC’s Enforcement and Intelligence Director, spoke about some important findings the UKGC had made recently about AML. He noted that operators can and should be looking at customers’ data more closely to identify potential threats better.
Advice for Operators and Operator Practices
The UKGC has advised operators of gambling sites to rethink the procedures they follow when monitoring and carrying out reviews of customer accounts. Factors such as product risk, a customer’s location and their transactions should all be considered when determining the level of risk.
According to Pierce, some operators have failed to properly consider a customer’s salary and spending habits. This could result in the operator failing to spot cases of irregular spending, which can be a sign of AML or even terrorism.
It seems to be the case that operators have been relying too much on information that’s freely available regarding terrorism financing and money laundering. They have also been expecting customers to self-declare things, which people don’t always do.
Some operators have been found guilty of allowing customers to make large transactions before carrying out the appropriate AML checks. They have been failing to do this because they’ve been relying on financial triggers to alert them to any signs of wrongdoing.
According to Pierce, operators should start communicating with a new customer soon after they’ve joined a site. They should also have a set of realistic thresholds regarding money and other factors that they stick to.
These thresholds should not just be realistic; they should also be effective. If someone passes a threshold, i.e. they make a particularly large deposit, this would encourage the operator to check on the customer to ensure everything is above board.
The UKGC is of the opinion that many operators have been failing to stick to their own procedures. This is because they haven’t been obtaining information regarding customers’ source of funds during the initial review stage.
Dealing with Threats
Pierce also spoke about different threats that the UKGC is dealing with. Two of the primary ones include artificial intelligence (AI) and cryptocurrencies, also known as crypto. Both of these are gaining in popularity and will likely evolve and pose more challenges for the UKGC in years to come.
Many gambling sites accept cryptocurrencies such as Bitcoin, Ethereum and Tether. Many sites haven’t experienced any major issues with crypto. However, crypto isn’t regulated, and concerns remain about its usage and the safety of people using it.
Pierce said that as more and more operators begin accepting cryptocurrencies at their sites, it’s important that they fully understand how crypto works. They should know about its advantages and disadvantages and the full range of services that crypto wallets offer.
As for AI, this can be used for a practically endless range of things, including forgery. Someone could, for example, create false ID documents or even documents that provide incorrect information about a customer’s source of funds.
Gambling sites only allow each person to have one account. With AI, someone could, in theory, set up multiple accounts by supplying false data and creating documents that are believed to be genuine even though they’re lying about key pieces of information.
There have even been cases of malicious people obtaining bank account data, creating gambling accounts and using the money in the bank account to make transactions. Accounts linked to money laundering, also known as mule accounts, have been growing in frequency recently.
In short, the UKGC wants all operators to be more stringent with their checks and more vigilant when spotting signs of money laundering or terrorism funding. Operators should stick to their own policies more and follow any instructions given by the UKGC.
