Publishing the fourth edition of its guidance on the prevention of money laundering and terrorism financing, the UK Gambling Commission has stressed the responsibilities of casino operators to take action.
In the near 100-page document, entitled The prevention of money laundering and combating the financing of terrorism: Guidance for remote and non-remote casinos, the regulator says it expects licence-holders to have in place policies, procedures and controls covering the risks they may relating to money laundering and terrorist financing.
“Using the money in casinos, regardless of the amount, that is the proceeds of any crime, can amount to money laundering if the person using or taking the money knows or suspects that it is the proceeds of crime,“ the Commission writes.
“Money-laundering offences can be committed by both the customer and casino employees, depending on their respective levels of knowledge or suspicion.”
The report is led by the recommendations of the Financial Action Task Force, an EU inter-governmental body, responsible for setting international standards on AML and CFT frameworks and procedures.
To date, legal frameworks on money laundering have focused on wide-ranging prevention and detection of the activity as a mechanism to finance criminal activities.
The commission highlights that, to date, money laundering undertaken in gambling enterprises has primarily taken two forms. Firstly, so-called “classic money laundering,” namely the passing of stolen funds through some form of legitimate business transaction or structure; and, secondly, “criminal spend,” in which stolen money is used to fund gambling as a leisure activity.
Detailing the role of licensed operators in fighting money laundering and corruption, the regulator reiterates that operators must uphold the three licensing principals set out by the Gambling Act 2005, specifically:
- To prevent gambling from becoming a source of crime or disorder;
- That no operator can be associated with criminal activities;
- Ensuring that no operator’s business structures or products can become a mechanism for supporting crime.
Gambling transactions must adhere to the Proceeds of Crime Act, which demands that operators should report instances of known or suspected money laundering or terrorist financing by customers to the National Crime Agency.
The Commission also reminds licensed operators that there is “no minimum threshold for the management and reporting of suspected money laundering or terrorist financing activity”.
At an executive level, the regulator states that it is vital corporate officers have/gain sufficient knowledge of their business’ risk exposure, combined with the sufficient authority to prevent money laundering and terrorist financing once detected.
“Senior management must be fully engaged in the processes for a casino operator’s assessment of risks for money laundering and terrorist financing and must be involved at every level of the decision making to develop the operator’s policies and processes to comply with the Regulations,” the Commission writes.
“Disregard for the legal requirements, for example, turning a blind eye to customers spending criminal proceeds, may result in criminal or regulatory action.”