The Gambling Commission has published its money laundering and terrorist financing risk assessment of the British gambling industry that informed HM Treasury’s response to the consultation on the Fourth EU Money Laundering Directive, on which we have previously reported, that confirmed the Government’s decision to exempt gambling sectors which are considered to be lower risk, apart from non-remote and remote casinos (which cannot be exempted).
The Commission’s assessment (that can be downloaded below):
- indicates that, in addition to considering the casino sector to be higher risk, it considered the non-remote (land-based) betting sector and the remote betting and bingo sectors “as having a higher risk relative to other gambling sectors”, which serves to confirm that the betting sector in particular can count itself lucky to be exempted from the new Money Laundering Regulations, and
- will be reviewed on an annual basis. The commission states that this “will contribute to determining the Commission’s focus and to influence future NRAs [ie National Risk Assessments] and in particular whether providers of gambling services other than casinos should continue to be exempt from the requirements of the Money Laundering Regulations”
The Commission states on its website:
“Therefore, the current position will be maintained where only holders of casino operating licences will be subject to the requirements under the new Money Laundering Regulations.
However, government recognise that risk remains in the gambling industry and improvements need to be made through continual efforts. The government has made clear that it will regularly review its position in relation to the money laundering and terrorist financing risk that gambling providers present.
Moreover it has asked the Gambling Commission to continue to evaluate this risk across all gambling sectors – taking into consideration the effective implementation and effect of the Gambling Commission’s licensing conditions – and this information will contribute to and influence future NRAs.
Importantly, the Government recognises that the risk levels attributed to a particular gambling sector are not static and will vary over time. As a result, where a gambling sector can no longer be deemed low risk (including where the sector fails to effectively manage the money laundering and terrorist financing risks) then it will likely lead to their inclusion within the provisions of the new Regulations, subjecting that sector to its requirements.
It is therefore imperative that gambling providers comply with the requirements of the Gambling Act and the strengthened Licence Conditions and Codes of Practice (LCCP) to ensure that they have effective policies, procedures and controls in place, and continue to raise standards.
Those operators who will not become subject to the new Regulations are reminded that:
- they still have other duties to prevent money laundering under the Gambling Act, Proceeds of Crime Act, and the LCCP
- there is a clear need to further raise standards across the industry
- government has warned it has the power to include sectors within the new Money Laundering Regulations at a later date if those sectors are assessed as being higher risk”