UK Gambling Commission Flags Rise in AI-Driven Attempts to Evade Due Diligence Checks

The UK Gambling Commission has raised alarms over the growing use of artificial intelligence to bypass customer due diligence procedures, highlighting it as a key concern in its latest list of emerging risks related to money laundering and terrorist financing. According to the regulator, there has been an “increase in the scale and sophistication” of technology being used to deceive operators, including the creation of falsified documents, deepfake videos, and manipulated images involving face swaps.

In response, the Commission has stressed that staff employed by gambling operators must be “appropriately trained” to scrutinise documentation and be equipped to identify materials that may have been fabricated using AI tools. The update warned that “staff must consider all information when conducting due diligence and that all submissions must be ‘appropriately scrutinised.’”

The Commission also warned that individuals attempting to falsify documents or alter pictures of themselves to gain access to gambling services are more likely to be involved in illicit activity, including money laundering and terrorist financing. The regulator linked the rise in these tactics to the broader trend of technologically enhanced criminal behaviour in the sector.

Beyond AI-related threats, the Gambling Commission listed 12 additional high-risk factors that operators are urged to remain vigilant about. Among them was a noticeable uptick in white-label partnerships, where some licensed gambling companies have failed to “conduct sufficient due diligence measures” regarding their white-label relationships. The report referenced the recent departure of operator Stake from the UK market following regulatory scrutiny. Stake, which had operated under a white-label license via TGP Europe, exited after the Commission investigated links between its marketing strategy and a high-profile OnlyFans creator on the platform X.

In its update, the regulator wrote: “The assessment of these risks should include consideration of the risks posed to the operator by the jurisdictional location of their third party, transactions and arrangements with business associates, and third-party suppliers such as payment providers and processors, including their beneficial ownership and source of funds. Effective management of third-party relationships should assure operators that the relationship is a legitimate one, and that they can evidence why their confidence is justified.”

Other emerging concerns cited by the Commission include gambling suppliers’ products being found on unregulated, black market sites. The regulator warned that offering such services might “facilitate criminal activity,” raising the stakes for licensed suppliers to better monitor how and where their games are being used.

An “increasing interest in cryptoassets” within the licensed gambling space was also noted, as was a particular emphasis on the rise of crash games, which the Commission believes may be exploited for money laundering purposes. The regulator explained that the nature of crash games, which often involve rapid play and quick cashouts, makes it easier for suspicious financial behaviour to be concealed. “There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game (where these behaviours are inherently more common), and that transactional monitoring controls may not be effective in detecting suspicious activity,” the Commission stated.

By fLEXI tEAM