Gambling Commission warns operators over AI deepfakes in due diligence process

The Gambling Commission has said attempts to bypass customer due diligence checks using AI are on the rise in the UK, as part of its latest emerging money laundering and terrorist financing risks list.

The update noted that the regulator was aware of an “increase in the scale and sophistication” of AI tech to circumvent checks, including false documents, deepfake videos and face swaps.

The Gambling Commission said staff at operators must be “appropriately trained” to assess documentation, as well has have the ability to determine what documents have been made with AI.

The regulator noted staff must consider all information when conducting due diligence and that all submissions must be “appropriately scrutinised”.

Per the update, consumers who falsify documents or pictures of themselves to open accounts were far more likely to have criminal intentions, including money laundering or terrorist financing.

Alongside AI concerns, the Gambling Commission laid out 12 other increasing risk factors for operators to dedicate awareness and resources to.

Among those were a rise in white-label partnerships, with some operators being flagged for “failing to conduct sufficient due diligence measures” in relation to those relationships.

White-label deals have been called out by the regulator recently following Stake’s exit from the UK.

The operator was licensed in the UK on a white-label basis via TGP Europe, before leaving the market after a Gambling Commission investigation linked its marketing to a popular OnlyFans content creator on X.

The update read: “The assessment of these risks should include consideration of the risks posed to the operator by the jurisdictional location of their third party, transactions and arrangements with business associates, and third-party suppliers such as payment providers and processors, including their beneficial ownership and source of funds.

“Effective management of third-party relationships should assure operators that the relationship is a legitimate one, and that they can evidence why their confidence is justified.”

Other concerns highlighted by the regulator included suppliers’ games appearing on black market sites, with the Gambling Commission noting that providing such services could well be facilitating criminal activity.

The Gambling Commission also highlighted an “increasing interest in cryptoassets” within the licensed sector, while crash games were also flagged as a potential money laundering venture due to the nature of the gameplay.

“There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game (where these behaviours are inherently more common), and that transactional monitoring controls may not be effective in detecting suspicious activity,” the Gambling Commission added.