Susan Grossey: A rap on the online knuckles
12 Jan 2018

Susan Grossey has been making her living from crime for over twenty years. She provides anti-money laundering training and advice to the regulated community in the UK, Guernsey, Jersey, the Isle of Man and Gibraltar, and writes and talks on the subject at every opportunity. As her hobby she writes historical novels – about financial crime.

AML regulation of the gambling sector in the UK is complicated; even I (writing as an AML obsessive) am sometimes confused about who is in and who is out.

However, one sector that is most definitely in is online gambling, and last week the Gambling Commission – as AML supervisor for this industry – had hard words for providers of online gambling services.

In an open letter, the GC chastised them for “common themes in failings, practices and concerns” in the areas of AML and social responsibility.

Looking specifically at the AML comments, some of them have caused me to drop my head to the desk and reach for the Jaffa Cakes. (Father Christmas brought me a triple pack – smart man.)

Here we go:

  • “It was of concern that some MLROs were unable to provide suitable explanations as to what constitutes money laundering and had no understanding of the main principles under POCA” – that’s MLROs, not ordinary staff!
  • “MLROs had neither made nor kept any note of specific cases or referrals [of SARs] and there were no documented risk assessments” – how can an MLRO sleep at night, given the weighty legal responsibility of the role, without reams (or e-reams) of documentation?
  • “There was also lack of understanding as to what would constitute ‘tipping off’ under section 333A of POCA” – so presumably staff are telling customers that things are delayed or refused because of money laundering concerns …

As the BBC explains in its coverage of the letter, a third of all gambling in the UK now takes place online, so this is no longer a niche, specialist, low-value market.

Physical casinos have an excellent record for spotting money laundering – not least because they have centuries of experience of spotting criminal activity of all sorts – but their online cousins (or at least, those regulated in the UK) seem to be much less aware of the risks they face. Ironic, given that their whole business is the calculation of risk.

This piece first appeared on Susan’s blog, I hate money laundering.

Related topics:

UK: Regulator investigates 17 online casinos over money laundering issues

Ending money laundering in Europe’ – a critical summary of Transparency Int. latest report

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

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