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Gambling operators face new anti-money laundering obligations under revised licensing regime

Out-Law News | 28 Oct 2016 | 1:09 pm | 1 min. read

Gambling operators in Britain will be subject to a new obligations aimed at preventing money laundering and terrorist financing under new licensing conditions due to come into effect on 31 October.

The revised licensing conditions and codes of practice (LCCP) (81-page / 1.43MB PDF) will require gambling operators to "conduct an [appropriate] assessment of the risks of their business being used for money laundering and terrorist financing" and then implement "appropriate policies, procedures and controls to prevent money laundering and terrorist financing".

The new licensing provisions also require gambling operators to account for the use of digital currencies. Gambling operators must put in place policies and procedures relating to payments by digital currencies, as well as by cash and other cash equivalents, to "minimise the risk of crimes such as money laundering, to avoid the giving of illicit credit to customers and to provide assurance that gambling activities are being conducted in a manner which promotes the licensing objectives".

In a statement the Gambling Commission said: "We think that the most effective regulatory approach is to focus on the outcomes we expect operators to achieve. In some areas we specify particular rules or processes, but where possible, we aim to allow licensees to take differing approaches to meet our requirements. This includes using rapidly developing technological tools and data analytics."

"Our outcomes based approach puts an increasing emphasis on the need for licensees to evidence their decision-making processes, and to be accountable for managing available information. This helps to assure us that the licensee is serious about assessing, managing and mitigating risks. This evidence base will also be important to ongoing compliance work and in future enforcement cases," the regulator said.

Gambling law expert Christopher Rees-Gay of Pinsent Masons, the law firm behind Out-Law.com, said the changes relating to AML and payments are among the "main changes" made to the LCCP.

"Anything the Gambling Commission can do to prevent money laundering and terrorist funding can only be beneficial for both the Commission and operators," he said.

The new LCCP also places new restrictions on the installation of gaming machines in betting shops, bingo halls and casino premises.

Under the new framework, betting shops will only be permitted to install gaming machines in their premises if they also provide "substantive facilities for non-remote betting". Similar requirements to provide "substantive facilities for non-remote bingo" and "substantive facilities for non-remote casino games and/or games of equal chance … available in the premises" will apply to bingo halls and casinos respectively.

Each gambling operator will have to ensure there is "appropriate supervision" of their facilities for gambling by staff "at all times".