Money Laundering And The Gambling Industry

With a bookmaker being ordered to pay millions for failing to prevent money laundering, Nicola Sharp and Syedur Rahman examine how the gambling industry can tackle the problem.

Bookmaker William Hill has been ordered to pay £6.2M for what the Gambling Commission called systemic failures regarding money laundering.

The Commission has ruled that the bookmaker breached anti-money laundering and social responsibility regulations between 2014 and 2016. A lack of proper checks meant that ten customers were able to deposit large sums of money that were the proceeds of criminal offences. These payments led to gains for William Hill of around £1.2M. But the bookmaker is now having to pay that back, plus a £5M penalty.

The Gambling Commission has stated that William Hill was guilty of a systemic failing. This failing related to not making proper checks about the origins of the money and not establishing that the people using it to bet were problem gamblers.

How bookmakers make checks to determine if customers are problem gamblers is another article that can be written by someone else. Here, we will concentrate on William Hill's failure to identify the huge sums being placed as bets by these people as the proceeds of crime.

The betting was either an attempt to launder the money - to make it harder to identify as cash that had been obtained through criminal activity - or simply the people who had gained it through crime spending it for their pleasure. William Hill willingly took the money as bets and made large gains from it. But we would argue that this is an issue that goes beyond one bookmaker's shop or online presence.

Vulnerability

Now that money laundering has become an issue of major interest to the authorities in the past decade or so, there will be many in the gambling industry that need to take a close look at the way they function and their vulnerability to those looking to launder money.

The government's "National Risk Assessment of Money Laundering and Terrorist Financing 2017'' repeated the previous year's assessment's claim that gambling operators were allowing money launderers to use their facilities due to poor compliance with money laundering legislation.

The report referred to the anonymity of non-online betting as a way for people to spend the proceeds of crime. It even stated the risk of criminals gaining control of licensed gambling operations for the sole purpose of money laundering.

Guidance

The Gambling Commission has not...