LexisNexis Risk Solutions: Industry must act on growing AML threat

Global analytics provider LexisNexis Risk Solutions has deemed that the gambling industry in the most at risk of money laundering, as a result of research contained within its newly published report.

Titled ‘On the frontline: The UK’s fight against money laundering,’ it comes at a time when the Gambling Commission is cracking down a number of operators for “systematic failings,” the most recent of which saw Ladbrokes Coral hit with the £5.9m penalty package.

According to the report one in three professionals within the industry believe it is the most at risk sector concerning AML failures, a number which rises to 41.9 per cent of those surveyed from other regulated industries.

A culture of internal complacency is pointed to as the biggest internal barrier to combating money laundering, stipulated as 39.2 per cent, with the same number stating UK regulations are only “somewhat effective”. 

Furthermore, 82.3 per cent of gambling firms state that compliance budgets have significantly increased over the last two years, driven by added investment in technology that is aimed at tackling the problem.

Michael Harris, director of financial crime compliance and reputational risk at LexisNexis Risk Solutions, explained: “The threat money laundering poses to the gambling sector is very real, and this fact is clearly recognised by those working within it too.

“The industry needs to take urgent steps to address this growing threat by ensuring that customer due diligence checks are conducted before allowing any gambling activity to begin, and, given the rise in online gambling, should consider embracing digital know your customer technologies.

“This, along with training those teams dealing with customers on the frontline to spot money laundering red flags and adopt a risk-based approach, gives gambling operators the best chance of fighting financial crime and meeting their legal obligations.”

Earlier this year the UKGC released its 2018/19 Enforcement Report titled ‘raising standards for consumers,’ intended as a support tool that the industry can use and digest the lessons to be learned for the future.

The watchdog stressed that £19.6m in penalties had been levied against firms for money laundering failures or not meeting social responsibility obligations.