Anti money laundering laws – fair, unfair or fair enough?
Anti Money Laundering Laws (AMLs) are in place to prevent illegal financial transactions masked via online payments. Under UK law, any business operating in the financial sector, including online betting sites, must abide by AMLs.
As a nation with one of the largest regulated online gambling scenes worldwide, the Gambling Commission (UKGC) enforces strict anti money laundering and anti terrorist funding laws for betting sites to follow.
However, as the UK government tries to stay one step ahead of more sophisticated money laundering techniques and growing global tensions, betting companies are burdened with more AMLs and rules than ever before.
What are AMLs?
The Money Laundering, Terrorist Financing, and Transfer of Funds (Information on the Payer) Regulations were enacted in 2017. This legislation provided the foundations for modern AMLs and required all online betting companies to conduct risk assessments of their sites to prevent illegal money laundering.
Since 2017, the UKGC has updated the law several times. Amendments included a shift from EU to UK financial sanctions following Brexit and requirements to monitor an updated list of high-risk nations from 2024.
However, AMLs are not for online casinos only. Any other businesses in the financial sector, like accountants, estate agents and operators dealing in large sums of money must adhere to AMLs.
Benefits of AMLs
Ultimately the benefits of AMLs are relevant to bettors and the laws help the online casino industry play its part in identifying suspicious financial activity. As a result, online betting operators can support government institutions and authorities by tightening money services and tracking unusual account behaviour.
In some instances, casinos and operators can monitor individual player activity to provide better services and understanding of their customer base. Protocols like verifying bettors’ ages via Know Your Customer (KYC) screening can prevent underage gambling. Also, bookmakers’ monitoring of financial transactions can help with safer gambling interventions.
The UK government released guidance in 2023 on the powerful impact betting sites can have in curbing gambling addiction via AMLs, stating how background knowledge of a bettor can improve:
“…the integrity and probity of the applicant and the applicant’s ability to conduct gambling in a solvent and responsible manner in compliance with law and regulation.”
The Gambling Commission also updates legislation and guidance in response to global political events. For instance, in February 2022 following Russia’s invasion of Ukraine, the UKGC posted reminders detailing how companies could remain consistent with UK sanctions and financial restrictions against Russian persons, business owners and bank account holders.
Such guidance means that online gambling sites can support the government in reacting to events of national and global significance.
Negatives of AMLs
Despite the broad benefits, there are clear downsides for betting sites as a result of AMLs. One of the big issues facing UK online gambling operators is the level and amount of responsibility, and the burden of adapting to ever-changing money-laundering activities and rules.
The UKGC and legal authorities are ultimately responsible for finding ways to prevent money laundering activity. However, are casinos asked to do more than should be reasonably expected of them in the anti money laundering fight against anti money laundering?
Currently, just some of the demanding requirements facing betting sites include:
- Conducting regular risk assessments of their business and services
- Using Know Your Customer tools and protocols
- Tracking customers’ financial transactions for irregular activity or unusually large transfers
- Appointing an NO (Nominated Officer) – someone who checks that a company is up to date with AML protocols and rules
New rules and guidance are frequently added, increasing the complexity of AMLs. For instance, in May 2024, the Gambling Commission announced three new legislation changes that companies must follow.
Failure to keep up with the demands of AMLs has impacted high-profile companies. In 2024, Bet365 was fined nearly £600,000 by the Gambling Commission for several incidents of mismanagement of AMLs. These included skipping new customer checks, poor KYC procedures and failure to enforce annual self-verification checks.
Moreover, there is evidence to suggest that AMLs aren’t always effective in helping problem gambling. In March 2024, one bettor lost £23,000 in 20 minutes on William Hill following loose background checks. Inevitably, they received the biggest UK Gambling Commission fine in history – £19.2 million.
Have betting sites been given too much responsibility for enforcing AMLs?
Currently, UK casinos and operators have a huge responsibility to enforce AMLs. As a result, they’re almost as much law enforcement operatives as gambling providers. The lines appear to be blurring between an operator providing safety and security for their customers and acting as law enforcers. Fair, unfair or fair enough?
Overall, betting sites must ensure financial safety for their customers and adhere to UK laws. However, having to act as a key player in preventing anti money laundering activity seems like a legal role that asks way too much of these companies.
Ultimately, it is the overall responsibility of the UK Government and its agencies to stop illegal financial activity online, not betting sites. Of course, asking and expecting support is reasonable, but some of the current measures appear too much for some brands to handle – leading to huge fines and sanctions.
No let-up: the future of betting sites and AMLs in the UK
In addition to the core objective of AMLs, they deliver some other clear benefits such as helping prevent gambling addiction and underage betting. However, increasing amounts of checks, rules and guidance means AMLs are too demanding.
Presently, it seems likely that UK betting companies will be asked to tighten their enforcement of AMLs rather than loosen such measures. Through KYC, monitoring, verification checks and keeping up with the current guidance, bookmakers have to adapt and react quickly for no means of their own but to support the UK government’s battle against money laundering.
Also, criminals committing money laundering often implement new ways to mask shady financial transactions from online sites. Such endeavours to stop these activities could lead to further restrictions for regular bettors in the future, such as deeper financial risk checks.
Certainly a topic to watch closely over the next few years...