25th May 2018
GAMLG Launch Anti-Money Laundering Good Practice Guidelines for Licensed Betting Offices and Remote Gambling
KEEPING GAMBLING FREE FROM FINANCIAL CRIME
New anti-money laundering guidance for land based and online betting has been launched today, helping to ensure bookmakers remain at the forefront of addressing and preventing money laundering.
Developed by the Gambling Anti-Money Laundering Group (GAMLG), the new best practice guidelines aim to ensure the identification, reporting and mitigation of risks, both for betting shops and for online gambling operators.
While the gambling sector has formally been classified by the Government as being of low risk, the industry remains focused on combating financial crime and are constantly reviewing policies and guidance to ensure that the industry remains low risk.
The best practice document is aimed at setting common standards across online and retail betting operators to assist staff in spotting potential fraudulent activity, developing a clear reporting process, and more generally raising awareness for all levels of staff, from customer-facing staff through to those at board level.
Keith Bristow, GAMLG Chairman, said:
"This new best practice document aims to ensure the identification, reporting and mitigation of money-laundering risk across the retail and online betting sectors. It's publication will raise awareness of the work being undertaken to mitigate money laundering risk and ensure that lessons from the sector are shared with other industries working to tackle the issue".
GAMLG’s Progress and Initiatives for 2017
In May, following extensive industry cooperation, we the launched the GAMLG ‘AML Risk Assessment for Licensed Betting Offices (LBOs) and Remote Gambling Industries’.
This was a key document in setting good practice guidelines for Risk Assessments in the sectors that we represent (see section below)
In July, we completed our work on ‘Raising Customer Awareness Guidance’.
This guidance for both the remote and LBO gambling sectors, set out the minimum standards to raise a customer’s awareness of the circumstances, for when they may be approached and asked to provide further information to confirm their identity, or origin of the funds used to bet with.
This information, presented in a Q&A format, was agreed and inserted into the remote companies’ website help pages from 1st September. We completed the second part of the agreed actions on 1st January 2018 with the distribution of our ‘Getting to know you better’ leaflet to the LBOs. This leaflet will be handed to customers to back up our requests for customer ID, or source of funds/wealth supporting evidence.
To again derive additional minimum standards across the sectors and to compliment the AML Risk Assessment and the Raising Customer Awareness Guidance; GAMLG produced a Source of Wealth Guidance briefing document. The sections within this document covered:
Review triggers (product & customer ‘red flags’, customer activity, internal referral and escalation)
Evidence gathering (open source information availability and customer requests)
Evidence evaluation (strong & weak evidence and handling insufficient evidence)
On the 18th October we completed our work on our three guidance documents, following the approval of the ABB Council and distributed the ‘Retail ID Standards Executive Summary’ to our membership.
For the first time in the LBO sector, there is agreement on minimum ID industry standards for establishing customer identity. This enables the sector, based on a risk based approach, to respond consistently to particular customers and circumstances which includes establishing the identity of previously unidentified customers.
In summary, following GAMLG recommendations, ABB members adopted minimum standards as a condition of membership for large bets, customer losses, gaming machines and the use of self-service betting terminal tickets.
These three guidance documents ‘dovetail’ together to provide the basis for ‘raising standards’ for operators, in terms of the minimum standard that we expect our members to act on. It also recognises that the different customer profiles of a business will always require individual Risk Assessments, which include the setting of the appropriate thresholds, relevant to that assessment.
Our Source of Wealth Guidance has a comprehensive reference library of information for our members to maximise on KYC information.
How we communicate to our customers in our Raising Customer Awareness Guidance, will assist with their appreciation of our legal responsibilities and help them understand that we aim to make gambling safer, fair and prevent it being linked to crime or lead to harm.
Additionally, this will also help to prevent unnecessary customer displacement, through lack of understanding of our responsibilities and challenge the customer view that our requests for information are simply an invasion of their privacy.
GAMLG believe that the initiatives that have been completed in 2017 and our current progress on AML good practice, will add significant value in preventing crime being associated with gambling
"For the first time in the LBO sector, there is agreement on minimum ID industry standards for establishing customer identity."
GAMLG launch new AML Risk Assessment for Licensed Betting Offices (LBO's) and Remote Gambling Industries.
GAMLG's first Money Laundering open Risk Assessment for LBO's and Remote Gambling was officially launched at the Thomson Reuter/KPMG Risk Summit at The Brewery, London, on Tuesday 25th April 2017.
This publication signals the UK’s first ever money laundering and terrorist financing risk assessment, of the online and retail betting gambling sectors.
The report is targeted at helping tackle the low, but nevertheless important risk, posed by serious and organised criminals of committing money-laundering crimes in the gambling industry.
This version of the report is a summary version of the full risk assessment undertaken, which details the absolute and residual risk levels after controls are effectively used across the industry. It would not be in the interests of any party to put the full risk assessment into the public domain as it could assist criminals who may seek to exploit vulnerabilities in the industry to launder money.
Commenting on the launch of the report, GAMLG Chairman, Keith Bristow, said:
“It gives me great pleasure to announce the first publication of the GAMLG Money Laundering Risk Assessment for the remote and Licenced Betting Office sectors.
“This thorough and independently reviewed Risk Assessment, shows that these sectors do not rest on their laurels of having been categorised as low risk by the Government for money laundering purposes, and are committed to continually working to enhance and raise the standards they have in place to further mitigate risks that do exist.
“It demonstrates that the sector realises the importance of putting the safety of the public and operators' staff first and ensuring the integrity of the industry".
Commenting on behalf of the Gambling Commission, Richard Watson, Programme Director for Enforcement and Intelligence, said:
“Risk assessments are widely seen as the foundation of any system to manage and prevent money laundering, which assists in developing effective and proportionate procedures and controls for prevention. We continue to work with the industry to raise standards in relation to risk assessments and the effectiveness of operators’ policies, procedures and controls for anti-money laundering. We welcome the commitment and collaborative approach being adopted through GAMLG which contributes to operators’ understanding of the money laundering risks to their businesses.”
This GAMLG risk assessment has been completed to:
Identify specific risks posed to operators within the gambling sector;
Promote better understanding of threats and risks within the sector;
Provide guidance to operators on the specific vulnerabilities of the sector, as well as the mitigation controls available to combat ML/TF risks; and
Encourage operators to examine their own risks.
The assessment takes into account a number of identified risk areas including those posed by customers; payment types; geography; product types; and employees.
Risks have been calculated following a comprehensive assessment of all the risks by GAMLG members and the residual risk remaining after controls have been implemented. These have been independently reviewed by third parties.
In October 2015 in the Treasury’s National Risk Assessment, the gambling sector was classified as low risk for money laundering purposes. Similarly, the retail betting sector recently received exemption by the Treasury from the Fourth Anti-Money Laundering Directive. However, a number of vulnerabilities within the sector were highlighted.
The industry is fully committed to continuing to raise standards, by further reducing the level of risk within the sector which exists from those who may want to use gambling companies as a means by which to legitimise criminal funds.
Please click on any image to view the full assessment