Gambling Commission Warns of Over-Reliance on Customer Declarations for AML Compliance

Betting companies are placing too much trust in customer self-declarations to combat money laundering, according to the UK’s Gambling Commission, which has flagged significant anti-money laundering (AML) shortcomings across the industry.

John Pierce, the Gambling Commission’s enforcement director, revealed that multiple firms have failed to adhere to proper AML protocols, raising concerns over the adequacy of their safeguards against financial crime.

“Where AML reviews are being conducted, some operators are not appropriately obtaining and scrutinising source of funds and source of wealth information,” Pierce stated at the Gambling Anti Money Laundering Group (GAMLG) Training Day.

Pierce highlighted several key failings within the industry, including instances where operators are “over-relying on customers’ self-declarations and open-source information” as part of their approach to money laundering and terrorist financing risk management. He also noted that some betting firms are “not following their own procedures” when it comes to collecting Source of Funds (SoF) data, while others fail to “appropriately scrutinise” the financial information provided by customers.

“We emphasise that we expect SoF information to be requested on a risk-based approach but, where this is done, it should not be treated as a tick-box exercise,” Pierce said.

“It is key that staff are given sufficient guidance on how to review documents and identify red flags, how to verify SoF information, and how to record their decision making.”

His comments come at a time when the gambling industry continues to expand. The Gambling Commission recently reported that online gross gambling yield in Great Britain increased by 21% year-on-year during the fourth quarter of 2024, reaching £1.54 billion ($1.92 billion). Online bets and spins also saw an 8% rise year-on-year, hitting 25.9 billion transactions.

However, this surge in revenue and betting activity occurred despite a 3% decline in the number of average monthly active player accounts during the same quarter.

With growing concerns over the effectiveness of AML measures, the Gambling

Commission is reinforcing its expectations for betting firms to adopt more rigorous financial scrutiny to prevent potential illicit activities.

By fLEXI tEAM