Gambling Commission highlights AML risks and FATF preparations

The Gambling Commission has warned operators that anti-money laundering (AML) failings continue to appear across the sector. This is despite improvements in overall compliance, as the industry prepares for a key international assessment of the UK's financial crime controls.

Speaking at the Gambling Anti-Money Laundering Group (GAMLG) Annual Conference, Director of Enforcement John Pierce outlined several recurring weaknesses identified through recent enforcement casework. He urged operators to ensure policies are being properly implemented in practice.

Policy and practice gaps are a concern

Pierce acknowledged that standards have improved in recent years. He said the scale of failings being uncovered by enforcement teams is generally less severe than in the past. However, he stressed that some common issues continue to appear repeatedly.

Among the most significant concerns is a disconnect between documented risk assessments and the controls being applied on the ground. According to Pierce, some senior executives have been surprised to discover that operational practices do not always reflect their stated policies.

"Make sure your application and practice matches the outcomes of your risk assessments and what your policies say should be happening." — John Pierce, Director of Enforcement, Gambling Commission

The Commission also talked about shortcomings in oversight by Personal Management Licence (PML) holders. Insufficient risk-based assessments, poor record keeping and inadequate staff training were also mentioned. In some cases, employees failed to identify potential fraud indicators within customer documents like bank statements and payslips.

AI and financial thresholds under scrutiny

Pierce also warned operators against relying too heavily on automated systems and financial triggers when they assess customer risk.

The Commission is not opposed to the use of artificial intelligence and algorithmic tools per se. Yet evidence gathered so far suggests some solutions are failing to deliver the required level of compliance. Operators considering these technologies were urged to ensure they are effective before being deployed.

Similarly, businesses that depend heavily on financial thresholds to trigger  AML reviews risk missing warning signs earlier in the customer journey. The Commission noted that failing to adequately risk-profile customers before thresholds are reached can lead to enforcement action.

New risk assessment due in July

One of the most significant announcements from the speech was confirmation that the Gambling Commission's updated money laundering and terrorist financing risk assessment is expected to be published in July. The document will consolidate risks identified across the sector and help operators strengthen their own AML frameworks.

An updated emerging risks bulletin is also planned for publication later this autumn.

Focus turns to FATF and illegal gambling

Looking ahead, Pierce said preparations are already underway for the UK's 2027 assessment by the Financial Action Task Force (FATF). This is the international body responsible for evaluating anti-money laundering standards. The Commission has begun engaging with operators as part of the process.

He also highlighted ongoing efforts to tackle illegal gambling, supported by £26 million in Treasury funding over three years. The past year saw the Commission issue 741 cease-and-desist notices. They also reported nearly 400,000 URLs to search engines and disrupted more than 1,100 illegal websites.

The speech also touched on future developments. These included ongoing discussions around financial risk assessments and the potential use of cryptoassets as a payment option within the regulated gambling sector. Pierce did note, however, that any progress would need to align with existing licensing and money laundering requirements.