How to tackle money laundering and terrorist financing in the gambling sector

By Helen Siegieda, 30 June 2025

As the UK’s regulatory authority for gambling operators, it is a key part of the Gambling Commission’s role to ensure that crime is kept out of the sector. The gambling industry is particularly vulnerable to exploitation by money launderers seeking to legitimise illicit funds, as well as by terrorist financiers aiming to store and transfer resources. 

This is because the sector provides products and services for the launderer to deposit, stake, lose some value, and then withdraw their remaining balance, which can make the money appear like it’s been generated through gambling activity rather than through predicate offences. 

This year, the Commission has highlighted key trends in money laundering and terrorist financing risks within the sector. After examining the Commission’s findings, this article will offer practical recommendations for gambling operators on how to strengthen their anti money laundering (AML) measures and manage these risks more effectively. 

Commission’s concerns

The issues identified by the Commission [1] include the following: 

1. Customer risk profiling and ongoing monitoring did not reflect the risks identified by businesses in their risk assessment.
2. Ineffective enhanced customer due diligence and know your customer triggers – leading to not spotting money laundering and terrorist financing risks.
3. Procedures that do not appropriately take customer salary or wealth into consideration to identify disproportionate spend.
4. High financial triggers that allow large sums of money to be transacted before the first AML review is undertaken on a customer.
5. Operators relying on financial triggers alone, rather than taking a risk-based approach and considering the knowledge they hold of the customer and their risk profile.

The Commission has also found several emerging risks which the gambling industry needs to take account of: 

• Changes to customer demographics in the high-end, land-based casino sector not being reflected in risk assessments, policies, procedures and controls.
• Customers using artificial intelligence to forge ID/SoF (source of funds) documents.
• Increase in the organised use of mule accounts and fraudulent activity, particularly in the betting sector. 
• ID farming where individuals or companies have collected personal data to obtain bank accounts and open gambling accounts for use in fraud.
• The use of cryptocurrencies presents new challenges. As cryptocurrencies become more prevalent, more payment providers will offer crypto payment facilities. Operators need to have a full understanding of the services offered by their payment providers.
• In the white-label space , there have been instances where operators have not risk assessed their relationships with their white label partners, and have not completed appropriate due diligence.

Practical solutions

The following recommendations are suggestions for the industry to implement, to help solve the issues identified by the Commission.

Issue a) Customer risk profiling and ongoing monitoring do not reflect the risks identified in the risk assessment.

Solution:

• Implement dynamic risk profiles: The risk assessment needs to be reviewed and incorporated into customer risk profiles, the transaction monitoring process and customer interaction procedures. The risks need to consider product, delivery channel, customer and geographic risks. Develop a system that uses a combination of quantitative and qualitative data to create dynamic risk profiles for customers. This should include factors such as jurisdiction, payment method, gambling habits, transaction history, and behavioural patterns.
• Regularly update profiles: Ensure that customer profiles are updated regularly based on ongoing monitoring, which can include automated alerts for unusual behaviour or transactions that deviate from typical patterns.

Issue b) Enhanced due diligence (EDD) and know your customer (KYC) procedures are not effectively spotting money laundering and terrorist financing risks.

Solution:

• Revise EDD procedures: Revisit the money laundering risk assessment and identify the indicators of money laundering within the business. Ensure effective EDD procedures, including additional documentation requests and questions for the customer, are implemented as controls to mitigate the risk. For example, one risk could be – if we onboard a politically exposed person (PEP) as a customer, then there is a risk that they could launder funds through gaming accounts. The controls would be: if a PEP is onboarded, we must identify the customer through customer due diligence (CDD) then escalate to EDD, asking for additional documentation including evidence of source of wealth (SoW). Documentation must be verified before a customer is allowed to deposit into their gambling account.
• Integrate technology: Utilise advanced analytics and machine learning to automate and enhance EDD processes. These technologies can help in flagging unusual patterns or discrepancies in customer data. Discrepancies should be investigated by trained staff to identify whether the concern with the account is to be escalated or can be managed locally. 

Issue c) Procedures do not appropriately take customer salary or wealth into consideration for identifying disproportionate spend.

Solution:

• Incorporate financial context: Enhance the risk assessment framework to incorporate customers' financial backgrounds, including income sources, employment status, and existing financial obligations. Develop controls including requiring customers to provide documentation to evidence SoW and salary, pauses on the account until such evidence is provided, and formalise the controls in a written procedure.
• Engagement with customers: Proactively engage customers in conversations about their financial situation and gambling behaviour when there are discrepancies between income and spend. 

Issue d) High financial triggers allow large sums to be transacted before AML reviews are conducted.

Solution:

• Lower financial thresholds: Reassess and lower financial thresholds for transactions that trigger an AML review. This should be based on a risk-based approach considering the customer profile.
• Implement tiered triggers: Establish tiered transaction thresholds that escalate due diligence based on the amount and frequency of transactions, ensuring that higher risk transactions are scrutinised earlier.

Issue e) Operators rely solely on financial triggers without considering the customer's overall risk profile.

Solution:

• Adopt a holistic risk assessment approach: Implement a comprehensive risk assessment model that takes into account non-monetary indicators such as customer behaviour, sudden changes in gambling patterns and withdrawal behaviours.
• Regular risk training: Conduct regular training sessions for staff to emphasise the importance of a holistic approach and the limitations of relying solely on financial indicators.

Striking a balance

Gambling operators face a complex challenge: they must navigate stringent regulatory requirements aimed at preventing money laundering and terrorist financing, while also maintaining a profitable business and delivering an engaging, enjoyable experience for their customers. Striking this balance is no easy task, especially in a competitive market where customer satisfaction and operational efficiency are key to success.

However, the integrity of the gambling sector – and public trust in it – depends on robust safeguards against criminal exploitation. Preventing illicit funds from being laundered through gambling platforms is not just a regulatory obligation; it is a vital responsibility that protects the industry, its customers, and the wider financial system.