New HMRC Report Highlights UKGC’s Dedication to AML and CTF

The UK’s tax, payments and customs authority, HM Revenue and Customs (HMRC), recently released a new report, highlighting the role of the gambling regulator, the Gambling Commission, in the fight against money laundering.

The report pointed to improvement in certain areas, considering that the number of supervised gambling operators identified as high risk marked a decrease for the 2023-2024 period.

Land-Based Operators at Higher Risk of Money Laundering

Notably, according to the HMRC report, the number of land-based and online operators supervised by the Gambling Commission decreased slightly from 263 for the 2022-2023 period to 247 for the 2023-2024 period. While in the prior year period, some 42% of the supervised businesses were assessed as high-risk, for 2023-2024, the percentage of high-risk gambling operators decreased to 39%.

In contrast to the decrease in the number of high-risk businesses, an uptick was observed in the percentage of gambling operators overseen by the Commission and identified as medium risk. In 2022-2023, that figure was 7%, while for the latest period, it more than doubled to 15%. Gambling businesses identified as low risk decreased to 46% for the 2023-2024 period, down by 5% from the figure recorded for the prior year period.

The HMRC’s recent report reads: “In the 2023-24 reporting period, there were 97 high, 37 medium, and 113 low risk firms identified.” Not unexpectedly, the land-based sector, according to the report, retained its higher risk of money laundering when compared to other gambling sectors. “Widespread compliance failings, particularly in relation to personal management, license holders’ competency levels and inadequate CDD and EDD checks have enabled high levels of transactions to occur,” the report added.

Non-compliance Decreases, Percentage of Compliant Gambling Operators Increases

The new HMRC report in the UK also focused on the efforts of the Gambling Commission in anti-money laundering (AML) and counter terrorism-financing (CTF), acknowledging that for the 2023-2024 period, the regulator had five full-time employees assigned for such cases. While that seems like a small number of people focusing on AML/CTF, close to 160 more employees from enforcement, compliance, licensing, intelligence and other teams, support their work.

For the 2023-2024 period, the Commission dedicated £227,700 to AML/CTF. This figure represented an increase when compared to £193,400 and £212,900, the sums dedicated to AML/CTF for the 2021-2022 and 2022-2023 periods respectively.

While the total number of desk-based reviews (DBR), or reviews and assessments conducted by the gambling regulator, marked an increase, the number of in-person visits dipped slightly. In total, the gambling watchdog conducted 32 DBRs for the 2023-2024 period, up from the 25 monitoring checks conducted for the prior year period. On-site visits for the latest period were eight, compared to nine for the prior year.

Measuring compliance, the Commission recorded a notable increase in the number of compliant gambling operators and a decrease in non-compliance. The latest results reveal that 50% of the businesses were assessed as compliant, increasing from 18% in the 2022-2023 period. Non-compliance dropped to 25% for the 2023-2024 period from 59% in 2022-2023.