Once again, we were pleased to play our part in two excellent back-to-back conferences from KnowNow Limited.
The first (held on 22 January 2020) was Social Responsibility for Gambling Operators – where David Clifton had the pleasure of conducting a “fireside chat” with Brigid Simmonds, Chairman of the Betting & Gaming Council (pictured below).
They had a wide-ranging discussion on current key topical issues for the British gambling industry, including how, in advance of the forthcoming UK Government review of the Gambling Act 2005, the BGC can turn around the seemingly relentless barrage of criticism from all sides – the press, the NHS, politicians and the wider public.
Their discussion is reported by GamblingCompliance in an article entitled “BGC warns a fragmented industry will not influence new UK Gambling Act”, in which Brigid Simmonds is quoted as saying that the gambling industry “won’t get any change we want unless we improve our public image and work together”.
The second (held on 23 January 2020) was Keeping Crime out of Gambling where – in an “AML Update” panel session – David debated with Anton Moiseienko (Research Fellow, RUSI), Neil Tyson (Director, Rightway Compliance) and David Del Bianco (EDD Team Leader, Gamesys, Spain) a variety of topical anti-money laundering issues affecting the UK gambling industry.
David prefaced the “AML Update” panel session with his following summary of AML developments that have affected the UK gambling industry over the last 12 months:
- Financial penalties totalling £15.6million were imposed on UK licensed gambling operators for AML and associated Social Responsibility failings. Those failings – reported by us on 15 May 2019, 12 June 2019, 13 June 2019, 11 July 2019, 31 July 2019, 11 September 2019 and 10 October 2019 – invariably involved customer interaction failings and/or failures to establish source of funds
- A good proportion of those operators were overseas-based, which was influential in the Gambling Commission’s Chief Executive, Neil McArthur, delivering a hard-hitting speech in Malta in October, intended to get Malta-based UK licensed operators to improve standards
- A particular focus of the Gambling Commission’s AML enforcement action became white-label providers; examples include Gamesys, EveryMatrix and FSB Technology
- The UK Financial Intelligence Unit Report for 2019 reported the largest sector year on year increase in number of Suspicious Activity Reports (93%) as coming from the gaming & leisure sector
- Consequences, as far as the top end of the land-based casino industry is concerned, included an exodus of ‘high-rollers’ from the UK, ostensibly choosing to game in jurisdictions with less rigorous AML controls. Some have suggested the same will happen with online ‘high-rollers’ as compliance requirements get ever tighter.
- The UK’s Gambling Commission came “top of class” in the annual HM Treasury AML/CTF Supervision Report that found significant weaknesses in the risk-based approach of other AML supervisors but nevertheless reported the UK’s AML/CTF regime to be the strongest of over 60 countries assessed by the FATF and its regional bodies (as at July 2019), meaning that UK licensed casino operators are subject to supervision and regulation by the toughest individual regulator in what is the toughest of over 60 jurisdictions assessed by the FATF.
- Updated Money Laundering Regulations (implementing the 5th EU Money Laundering Directive) came into force on 10 January 2020 and UK licensed casino operators (both land-based and remote) should already be updating their ML/TF risk assessments and AML/CTF policies, procedures and controls accordingly, taking into account the Gambling Commission’s updated AML Guidance.
David also quoted the following extract from a speech delivered by the Gambling Commission’s CEO, Neil McArthur, just one day earlier on 22 January 2020:
In 2017, we introduced a much tougher compliance and enforcement regime. We did that because we needed to significantly change the behaviour of operators and those who run them. There were far too many failures, too many repeated instances of lessons not being learned and – frankly – standards were not good enough. I realise that each press release we put out adds to the weight of negative stories, but it’s not my job to create positive stories or supress bad news stories. The cure lies in having good news to tell and not having bad news stories of compliance failures to publish in the first place.
The Commission will continue to be tough on those who do not meet our expectations, but I am pleased to be able to say that we are seeing signs that behaviour is changing. Here is just one example: Not so many years ago …… many operators argued that the MLRO had to be completely separate from the rest of the organisation. Safer gambling was something entirely different to AML controls. Now, when I visit operators, I am introduced to integrated teams, where money laundering and safer gambling issues are shared and a more holistic, real-time, view of each consumer is being built up.
UPDATE: You can download below a report of the two days (entitled “What the industry learnt from the KnowNow 3rd Annual Conference”) by Seventh Wave Training, whose Managing Director Adrian Sladdin chaired each of the Social Responsibility for Gambling Operators conference and the Keeping Crime out of Gambling conferences.