By Helen Siegieda, 29 July 2024
Recent events have put a spotlight on the role of the Gambling Commission, following its investigation into privileged information allegedly being used to bet on the date of the UK general election.
Given my own background as a former investigator for the Gambling Commission, it’s a good opportunity to explain more about this regulator’s important work. This also includes its role in helping to tackle money laundering and terrorism financing.
Issuing licences
The Gambling Commission regulates the UK gambling sector, including the National Lottery. It regulates the activities of all gambling companies who offer services to UK consumers, including land-based premises and the online space. It is managed by the UK’s Department for Digital, Culture, Media and Sport.
The Commission issues licences to gambling operators and individuals with key positions within the sector, and it sets standards which govern the activities of gambling firms and key individuals. These standards take the form of the Licencing Conditions and Codes of Practice.[1] Licence Conditions 12.1.1 and 12.1.2 discuss the requirements for the prevention of money laundering and terrorist financing, and measures for operators based in foreign jurisdictions.
The Commission monitors gambling operators’ compliance with the standards through compliance assessments. Any compliance assessments completed which raise questions regarding the conduct of gambling operators are referred to the enforcement team. Enforcement carry out regulatory investigations to determine whether the operator has breached any of the licencing conditions. The Commission has the power to issue regulatory actions, including the revocation or suspension of operating licences, and financial penalties.
The largest fine issued by the Gambling Commission to date was in March 2023. The fine was for £19.2m and issued to William Hill Group for social responsibility failures and anti money laundering failures.[2] Key findings from the investigation included customers being able to deposit large amounts without appropriate checks (one customer was able to spend and lose £70,134 in one month), training for anti money laundering staff being insufficient, and policies, procedures and controls lacking guidance on appropriate action to take following the results of customer profiling.
The Commission’s enforcement team also carries out criminal investigations into illegal gambling activity which is contrary to the Gambling Act (2005). The Commission liaises with law enforcement, HMRC and the National Crime Agency to coordinate investigations.
Strategic objectives
The Commission’s aims are to protect gambling customers and to keep crime, including money laundering and terrorist financing, out of gambling. Its strategic objectives are to:
- Protect children and vulnerable people from being harmed by gambling
- Achieve a fairer market with more informed customers
- Keep crime out of gambling
- Optimise returns to good causes from The National Lottery
- Improve gambling regulation
Money launderers can utilise gambling activity in order to place and layer their ill-gotten gains within the financial sector. Splitting transactions into small amounts, opening multiple gambling accounts, opening accounts under false identities, and depositing money and withdrawing it after minimal gambling activity, are all methods used in the laundering process.
The Gambling Commission has a responsibility to ensure the gambling industry has effective policies, procedures and controls to mitigate the risks of money laundering and terrorist financing, underpinned by completing a money laundering and terrorist financing risk assessment.