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UKGC updates its anti-money laundering regulations

The United Kingdom Gambling Commission (UKGC) has set out its new anti-money laundering regulations which are set to be implemented next year (2020).

The UK is one of the strictest regulated markets in the world for casino and gambling companies. Earlier this year the Financial Times reported that in 2018, betting companies operating in the UK paid record fines of £19.7 million. The majority of the fines went into the UK governments treasury (£13m) whilst £6.7m was used to compensate consumers. The UKGC toughened its regulations in 2018 and gambling companies were not quick enough to adjust.

The updated money laundering regulations will come into fruition on 10th January 2020 whereby all online casinos operating in the UK must review and amend their money laundering risk assessments. In order to continue to protect customers, online casinos within the gambling industry are required to follow the latest changes to the anti-money laundering regulations.

The UKGC has admitted that they will give time to allow casinos to adjust to the new rules. In a statement on their website, the UKGC states that:

"The Commission recognises that it takes time to implement changes and we will take that into account, but we expect to see that operators have acted promptly, invested appropriately (if technology is required to accommodate the changes) and implemented changes with the requisite urgency."

Online casinos have faced numerous fines in the past for failing to monitor their customers for money laundering. Despite the fines, the online casino industry in the UK alone is worth over £14 billion.

However, whether online casino industry profits have hit their peaks remains to be seen. The UKGC is considering a ban on credit card gambling - if the commission implement this plan, it is thought that profits will decline 'massively'. Unsurprisingly, casino companies will fight this ruling if it comes into effect, of course.

The changes to the anti-money laundering regulations are highlighted below:

  • Taking appropriate measures in preparation for, and during, the adoption of new products or business practices and to assess and mitigate any money laundering risks arising from such adoption, in addition to the existing and similar requirement for new technology (regulation 19)
  • Having specific policies, procedures and controls for the measures described above (regulation 19)
  • Taking appropriate measures to ensure that any agents that operators use for the purposes of their business are given appropriate training in anti-money laundering and counter terrorist financing (regulation 24)
  • Further direction in relation to what information may be regarded as 'obtained from a reliable source which is independent of the person whose identity is being verified' (regulation 28)
  • Further requirements for enhanced customer due diligence measures for high-risk third countries, complex or unusually large transactions, and where there are unusual patterns of transactions, or the transactions have no apparent economic or legal purpose, as well as customers who are beneficiaries of life insurance policies or the customer is a third country national who has received citizenship in an EEA state in exchange for the transfer of capital, purchase of property, government bonds or investment in corporate entities in the EEA state (regulation 33)
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