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Global rules on foreign direct investment (FDI)
Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
Royaume-Uni | Publication | août 2024
The growth of the UK gambling market, in particular online, has brought with it new opportunities for exploitation by criminals. Awareness of the way in which criminals may seek to use operators to launder the proceeds of crime and robust controls to prevent this is therefore key.
The UK gambling sector has been deemed to present a low risk of money laundering and terrorist financing by the UK government1. However, risks across the industry vary, with remote gambling, non-remote casinos and off-course betting characterised as high risk by the UK Gambling Commission (UKGC) as compared to other gambling sub-sectors2. Remote gambling is particularly attractive to criminals because of the high volume of transactions and potential for anonymity.
Key money laundering risks for operators to consider include the following, although these may not apply equally across all sub-sectors:
Remote and non-remote casinos are subject to the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs). These set out what relevant businesses must do to prevent their services being used for money laundering and terrorist financing. Operators subject to the MLRs must adopt and implement into their businesses certain AML/CTF controls, including risk assessments, appropriate CDD and record keeping practices and proper oversight by senior management.
Whether or not they are subject to the MLRs, all UK operators are required to uphold the licensing objectives set out in the Gambling Act 2005, the first of which is to prevent gambling from being a source of, associated with or used to support crime. In addition, the UKGC requires all licence holders to comply with certain AML responsibilities (for instance, under the Proceeds of Crime Act 2002), and adopt a risk-based approach consistent with its guidance on the Licence Conditions and Codes of Practice (LCCP). In particular, operators must follow Licence Condition 12.1.1, which applies to all operating licences except gaming machine technical and gambling software licences and which concerns anti-money laundering risk assessments and controls.
Guidance published by the UKGC to assist operators in navigating the risks posed by criminals seeking to exploit the sector, includes:
The UKGC has made it clear that in addition to guidance, operators must take into account learnings from enforcement action to inform AML/CTF risk assessments and controls.
In public statements against Hillside (UK Gaming) ENC and Hillside (UK Sports) ENC for anti-money laundering and social responsibility failures from April 20245, the UKGC published the below list of questions which operators may use as a guide in meeting expectations for an effective AML compliance programme. Operators should ask themselves the following:
Immediate action by operators should be taken to remediate any gaps identified by the above, and controls should be reviewed on a periodic basis to ensure ongoing compliance.
If you have any questions in relation to the AML/CTF risks impacting the gambling sector, including implementing policies and procedures to assist legal and regulatory compliance requirements, and reporting obligations please contact the authors.
With thanks to Joshua Creutzberg for his work on this briefing.
https://assets.ctfassets.net/j16ev64qyf6l/6ZYFtWrK3D7XhxbtcK9KFB/2c967fe64289d8313646fc48d6271b8e/Gambling_Commission_full_advice_to_Government_Review_of_the_Gambling_Act_2005.pdf
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Cross-border acquisitions and investments increasingly trigger foreign direct investment (FDI) screening requirements.
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