The UK Gambling Commission has issued a stark warning about emerging threats in money laundering and terrorist financing that gambling operators need to be aware of. In an update to its AML guidance released on April 8th, the Commission highlighted several sneaky techniques being employed by criminals, including AI-generated deepfakes and cryptocurrency crash games.
As these threats are becoming more and more complex, some players may consider alternatives to UK-regulated casinos, which operate under different jurisdictions such as Malta or Curaçao, but still implement robust security measures. These offshore casinos typically offer wider game selections, larger bonuses, and less restrictive verification processes while maintaining licensing from reputable international gambling authorities.
The UK Gambling Commission’s report raises particular concerns about AI technology being used to create false documentation and deepfake videos to bypass due diligence checks. According to the regulatory body, criminals are becoming increasingly adept at utilising these advanced tools to facilitate money laundering through gambling platforms. In response, operators are being urged to train staff specifically in identifying AI-generated documents during customer verification processes.
Cryptocurrency presents another significant risk area, with the Gambling Commission advising operators to treat crypto exchanges as high-risk channels for potential money laundering. The regulator specifically mentioned “crash games” offered in illegal crypto casinos, warning that these products can make it difficult to detect suspicious activity as they allow criminals to “camouflage high-risk behaviour” within the game mechanics.
Last month alone, the Commission imposed substantial penalties on two operators for AML failures. The Football Pools was ordered to pay £375,000, while Corbett Bookmakers received a heftier fine of £686,070 for more extensive violations.
The watchdog also revealed concerning practices where individuals are being offered money for their details, which criminals then use to open multiple accounts with gambling operators. These “mule accounts” potentially enable unlicensed betting intermediaries to operate undetected.
In physical establishments, the Commission identified instances of customers attempting to deposit large denominations of foreign currencies, including €500 bills, which present “significant money laundering risk.” Licensed operators have been advised to treat such transactions as high-risk activities.
The regulator also addressed software licensing concerns, noting that games developed by licensed software providers have been appearing on unlicensed websites operating in the UK. Operators are being warned to ensure their supplier partners aren’t connected to illegal sites, with the Commission’s CEO, Andrew Rhodes, previously stating that they don’t understand why anyone would want to be in business that supports illegal competition.
Under their UK licensing conditions, operators must conduct regular risk assessments and implement appropriate controls to prevent money laundering or face severe consequences, including financial penalties or license revocation.
As these threats evolve, both players and operators alike must remain vigilant. For players, understanding these risks is crucial when selecting gambling platforms, and for operators, developing robust security systems is not just a regulatory requirement but an essential component of maintaining consumer trust in an increasingly complex digital landscape.
