Emerging Money Laundering & Terrorist Financing Risks in UK Gambling

In April 2025, the UK Gambling Commission (UKGC) released an update on emerging risks of money laundering (ML) and terrorist financing (TF) across the gambling sector, in line with Licence Condition 12.1.1(3) of the LCCP. The update highlights new typologies, technologies, and behaviours threatening the integrity of licensed gambling operations in Great Britain.

Key Risks

• MSB Activity in Casinos:
  Money service business functions (foreign currency exchange, cheque cashing, third-party transfers) remain high risk, especially when involving €500 notes, PEPs, or unlicensed entities.
• AI and False ID Fraud:
  Use of AI-generated face swaps, deepfakes, and forged documentation is increasing, enabling sophisticated attempts to bypass due diligence controls.
• Personal Data for Hire:
  Third parties are paying consumers for ID documents to mass-open gambling accounts, often linked to mule activity or unlicensed betting intermediaries.
• Third-Party Partnerships:
  Operators are failing to conduct proper due diligence on white-label partners, loan sources, and investors, introducing exposure from high-risk jurisdictions and unknown fund origins.
• Cryptoassets:
  Crypto transactions remain a high-risk method for ML/TF, compounded by incidents like the ByBit theft and increased use of gambling platforms in laundering crypto-derived funds.
• Crash Games & Rapid Cash-Outs:
  The volatility of crash games creates camouflage for suspicious behaviour. Quick in–quick out patterns may go undetected within otherwise legitimate gameplay.

Threat Overview

The Commission’s review flags heightened risk across both remote and non-remote casinos. Changes in customer demographics, open-loop payment systems, and misuse of terminals reinforce the need for real-time monitoring and tailored controls.

Strengthening Compliance

Operators must urgently:

• Treat MSB users as high risk and apply enhanced due diligence.
• Detect and prevent use of AI-altered identity documents.
• Reassess onboarding processes to prevent exploitation through mass ID farming.
• Review third-party relationships, with clear visibility into beneficial ownership and funding sources.
• Flag crypto-funded gambling as a high-risk trigger requiring full source of funds checks.
• Monitor gameplay trends (e.g. crash games) for unusual withdrawal patterns.

Systemic Gaps

• Outdated Risk Assessments: Some casinos have not updated AML policies despite demographic shifts post-2020.
• Terminal Blind Spots: Payments through on-site terminals are less scrutinized, exposing gaps in transaction monitoring.
• Software Distribution: Casino games licensed by UK operators are appearing on unregulated websites, risking criminal fund flows through illegal markets.

Jurisdictional Watchpoints

The February 2025 FATF update identifies several jurisdictions subject to increased monitoring or calls for action. Operators must integrate FATF grey/blacklists into geographic risk assessments and trigger EDD accordingly.

Conclusion

The Commission’s message is clear: the AML/CTF threat landscape is evolving, and operators must adapt. From cryptoassets and AI to aggressive third-party schemes, the sector is being targeted through both innovation and exploitation.

Read the full article here
More information can be found on the FATF's website about: 

• Black and grey" lists 
• High-Risk Jurisdictions subject to a Call for Action 
• Jurisdictions under Increased Monitoring