Anti-money laundering and responsible gambling. Where have gambling firms gone wrong?

10 June 2020

Keeping crime, including money laundering and terrorist financing, out of the gambling industry,
is an ongoing responsibility for all gambling businesses, and a clear expectation by the
UK Gambling Commission (UKGC).

Casinos have further specific Anti-Money Laundering (AML) and Counter Terrorism Financing (CTF) requirements under the Money Laundering Regulations 2017 (MLR17). The requirements are applicable to both remote, and non-remote gaming activities, as defined within the Gambling Act 2005. MLR17 requires operators to put in place a risk based framework that considers and includes:

  • Identification and Verification of Customers
  • Customer Due Diligence and Enhanced Due Diligence
  • Ongoing Monitoring, Record keeping and Training
  • Policies and Procedures
  • Governance and Oversight
  • Suspicious Activity Reporting

Beyond AML/CTF, operators must provide their products and services in a socially responsible manner and encourage Responsible Gambling.

Social Responsibility Codes, which underpin the Licence Conditions and Codes of Practice (LCCP), set out the obligatory measures which licensees must adopt to ensure that they minimise the risk of customers experiencing harm from their gambling activities.

Gaming firms must put into effect robust policies, procedures and controls to ensure their business and gaming services are run in a socially responsible manner, such measures include, but are not limited to:

  • Having adequate customer safeguards
  • Monitoring gambling activity and identifying problem gamblers
  • Protecting vulnerable customers and underage players
  • Reviewing, recording and monitoring customer interactions
  • Communication and providing customers with sufficient information about the games they play, and guides to safer gambling
  • Training staff on how to identify and interact with problem-gamblers.

An essential purpose of Responsible Gambling measures is to improve self-awareness and create a supportive environment for customers. In order to do this, operators must provide the appropriate tools and support to their customers, allowing them to stay in control as well as make smarter decisions with respect to their gambling activities. Operators are also required to ensure that their staff and customers recognise the value of responsible gambling measures, with staff being subject to ongoing training such that they are confident in identifying problem gamblers and in appropriately interacting with such customers, to reduce their risk of gambling-related harm.

What's the problem?

Although gaming firms have been within scope of AML/ CTF legislation and Responsible Gambling requirements for some time, regulators have recently come under increasing pressure to ensure that authorised firms adequately discharge their obligations in protecting the sector and its customers, and adhere to regulatory requirements and industry standards. This bout of change and pressure has resulted in an unprecedented number of significant fines being levied on gaming firms by the UKGC, in the previous twelve months. This tells us two key things:

  • It confirms that the UKGC are taking their role of supervisory body, very seriously
  • That the UKGC have identified significant weakness in the AML/ CTF and responsible gambling frameworks of firms and that they will continue to use their regulator powers to review and penalise such organisations.

What are the consequences for non-adherence?

The risks of failing to adhere to all pertinent legal requirements, supervisory expectations, and industry standards, have been substantial, and have included:

  • Significant fines;
  • Alteration to, suspension, or loss of operating licences; and
  • Formal warnings.

The above measures, where applied by UKGC, can also lead to substantial reputational damage, and loss of current or prospective business opportunities. The costs of remediating any deficiencies can also be high. For individuals in those firms, it can also result in fines, prison sentences, or both.

Where have gambling firms gone wrong? 

UKGC has, over the previous 18 months, taken enforcement action against a number of the firms that it supervises, for a range of different deficiencies that were identified. Gambling firms have incurred substantial fines over this period and we are seeing this replicated in other jurisdictions for similar reasons. Generally, deficiencies stemming from AML/ CTF and Responsible Gambling measures included:

  • Lack of a compliance culture driven from the top-down
  • Inadequate policies, procedures, and controls
  • Inadequate implementation of policies and procedures
  • Poor senior management oversight
  • Inadequate training and awareness of staff
  • Inadequately defined, and an inadequate use of, red flags
  • Poorly defined roles and responsibilities
  • Insufficient resourcing to allow the firm to adequately undertake its responsibilities.

From a purely money laundering and terrorist financing risk perspective, these have included:

  • Failing to carry out, or obtain sufficient evidence for, Source of Funds and Source of Wealth;
  • Inadequate:
    • Business-Wide Risk Assessments (BWRA)
    • Consideration of relevant risks
    • Enhanced Due Diligence measures
    • Ongoing monitoring measures

From a Responsible Gambling perspective, these have included:

  • Not adequately identifying problem gamblers
  • Failing to put into place adequate customer safeguards
  • Failing to protect vulnerable customers
  • Inadequate:
    • Customer interactions and customer contact
    • Affordability checks
    • Compliance oversight
  • Allowing conflicts of interest.


BDO are the only UK accounting firm with a bespoke betting and gaming unit comprised of over 20 partners and directors who regularly work in the sector. We have extensive experience and knowledge of the UKGC’s expectations, and what good AML and Responsible Gambling measures look like.

We continue to provide remote and non-remote operators with tailored solutions and reviews to assist them in complying with their license conditions, in anticipation or following UKGC regulatory reviews, under section 116 of the Gambling Act 2005.

Our industry leading Economic Crime Advisory team has a wealth of knowledge and diverse expertise, across both the Financial Services (FS) and non-FS sectors.

By understanding your needs and business model, we can assess, on a Review and Recommend basis, the AML/CTF and Responsible Gambling framework that you currently employ and provide you with an independent, granular, assessment of the robustness of your controls. Where there are specific framework gaps, such as policies and procedures, staff training BWRA or compliance monitoring, we can focus specifically on those.

We also have a track record in the provision of tailored AML/CTF training to staff as well as Senior Management, which can be delivered onsite or on a remote-basis.

If you would like to see some examples of our work within the sector, please don’t hesitate to get in touch.