UK Gambling Commission flags rising money laundering and terrorist financing risks

The UK Gambling Commission has warned operators of rising money laundering and terrorist financing risks, including AI deepfakes and crypto crash games, in its updated guidance for licensees.

The warning follows penalties imposed on two companies last month for failures related to anti-money laundering (AML) and customer protection. In March, The Football Pools was fined £375,000 ($484,624), while Corbett Bookmakers was hit with a £686,070 (US$886,629) financial penalty.

In updated guidance published on April 8, the commission highlighted that some casinos—both online and land-based—are illegally offering money service business (MSB) functions such as foreign currency exchange and third-party money transfers.

The watchdog also highlighted attempts by customers to deposit large-denomination foreign currency, including €500 (US$557) notes, noting these carry a significant money laundering risk and should be treated accordingly.

Another growing concern involves individuals being paid for their personal details, enabling criminals to create multiple gambling accounts. These mule accounts may be used to act as unlicensed betting intermediaries.

The regulator warned that AI tools are being used to create fake documents, deepfake videos, and face-swapped images to bypass identity checks, and stressed that operators must train staff to recognize AI-generated materials.

Cryptocurrency transactions continue to be seen as high risk, especially given the rise in crypto thefts that may be laundered through gambling platforms.

Additionally, the commission raised concerns about the popularity of crash games, particularly those on illegal crypto casinos, noting that these games allow quick cash-outs with minimal playtime—making it difficult to detect suspicious behavior—and urged operators to strengthen their monitoring systems.

The commission has also reiterated its warning about licensed games appearing on unregulated UK-facing websites. Licensed operators are expected to ensure that their software partners are not involved with black market sites and must immediately cut ties if such links are discovered. Operators are required to report these incidents and outline the steps taken to prevent recurrence.

CEO Andrew Rhodes reinforced this message in a January webinar, questioning why any licensed business would engage with suppliers serving illegal markets.

The Gambling Commission stressed that all operators must conduct robust risk assessments around money laundering and terrorist financing and regularly update their controls.

Customers using MSB-related services should be treated as high risk and subject to enhanced due diligence procedures.

For land-based casinos, the regulator advised moving to closed-loop payment systems, noting that open-loop systems—those allowing movement between multiple payment methods—present a known money laundering vulnerability.