Status quo for UK gambling following EU money-laundering directive
The UK government has said that only holders of casino operating licences will be subject to the requirements of the new Money Laundering Regulations.
Due to come into force in June of this year, the new rules will look to tackle money-laundering activities in the UK, and it had been thought that gambling may be one of the areas more heavily targeted.
However, responding to the EU 4th Money Laundering Directive (4th AMLD), the government has said it will exempt gambling sectors deemed lower risk, with the exception of non-remote and remote casinos that cannot be exempted.
The government came to the decision after taking into account responses to the consultation and the UK National Risk Assessment (NRA), which deems gambling to be low risk compared to other regulated sectors.
As such, the current set-up, where only holders of casino operating licences will be subject to requirements, will remain in place.
In response to the decision, the UK Gaming Commission (UKGC) said in a statement: “The government recognises that the risk levels attributed to a particular gambling sector are not static and will vary over time.
“As a result, where a gambling sector can no longer be deemed low risk. Including where the sector fails to effectively manage the money laundering and terrorist financing risks, then it will likely lead to their inclusion within the provisions of the new regulations, subjecting that sector to its requirements.”
The UKGC added that it will “continue to work with the industry to raise standards and assess the effectiveness of operator policies, procedures and controls for anti-money laundering”.
The national regulator also issued a reminder to operators that will not become subject to the new regulations that they still have other duties to prevent money laundering under other laws, including the Gambling Act.
Peter Hannibal, chief executive of the industry-wide Gambling Business Group, has welcomed the decision to maintain the status quo and exclude all gambling sectors from the 4th AMLD that are not currently included.
Hannibal told iGaming Business: “The Gambling Business Group was at the forefront of this debate and hosted Treasury officials on a fact finding tour of a cross section of gaming venues to help inform its' intelligence gathering process as part of the 4th AMLD.
“There was a very real danger that Britain's highly regulated, highly responsible, low stake gaming sectors would have become embroiled in a Europe wide, one size fits all, dragnet that was both disproportionate and unnecessary.
“I believe one of the most compelling arguments was the industry’s commitment to the KYC or Know Your Customer philosophy; visitors to UK Gaming establishments will confirm the customer/staff relationship is more like a friendship, making it much easier to identify any changes in behaviour and activities which are outside of the norm.
“We cannot however rest on our laurels with KYC and responsible operators know that there is always room for further improvement in this critical area.
“If we continue to effectively develop our KYC methods and practices then we can assure ourselves that the wider Industry will not be subject to full AML regulation at any time in the future.”
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