Money laundering threat from online gambling upgraded to highest level
Latest report from the European Commission puts sector in the spotlight and delivers recommendations for change
The European Commission has upgraded the risk of terrorist financing and money laundering within the online gambling industry to the highest possible level.
In a new report, in which the governmental body assess the risk factors across a swathe of sectors, online gambling was upgraded to “very high” in terms of risk and vulnerability.
The European Commission highlighted the “non-face-to-face element” of the business, along with the rise of cryptocurrency and operator’s providing services in non-EU jurisdictions as core reasons for the rise.
The report also recognised cases where operators were using non-EU payment providers to facilitate operations, which also represented shortcomings.
While the report noted the industry had worked to implement measures to help prevent money laundering and terrorist financing, more could be done.
The report stated: “Online gambling operators have developed a good level of self-regulation and risk assessment, although their cooperation with competent authorities and financial intelligence units could be improved.
“Operators believe that they do not get from clear guidance on how to properly address the risks considering, in particular, the lack of feedback from financial intelligence units on suspicious transaction reports.”
In a set of recommendations to member states, the European Commission said far more could be done to lower the risk of the factors.
These included ensuring operators conduct regular training sessions for staff and for firms to put an AMLF (spell out) officer in place.
The Commission also suggested member states could require operators to develop a “systematic risk-based customer due diligence” which would kick in on a lower threshold of winnings, which currently sits at €2,000.
Other suggestions included a holistic approach to tackling money laundering and terrorist financing via closer collaboration between governments and regulatory bodies and to publish frequent reports on the quality of existing safeguards in place.