UK Betting Industry Exempted from Punishing AML Directive

Posted on: March 21, 2017, 01:00h. 

Last updated on: March 21, 2017, 11:43h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

The UK bookmaking industry has been exempted by the country’s Treasury from the new Fourth EU Money Laundering Directive, thus escaping the onerous and expensive fate of conducting due diligence on every transaction of €2,000 (£1,740 / $2,150) and above.

As the industry breathed a heavy sigh of relief, the government said the decision had been made after consultation with UK’s National Risk Assessment (NRA), which deemed betting, both online and off, to be low-risk in comparison with other sectors. Both land-based and online casinos, however, will not be exempted.   

Stay Vigilant

But the government emphasized that the industry must remain diligently committed to it anti-money laundering (AML) duties, or it may just find itself having to fill out the EU’s tedious transaction report forms after all.   

According to the UK Gambling Commission, “the government has made clear that it will regularly review its position in relation to the money laundering and terrorist financing risk that gambling providers present.”

As a condition of licensing, gambling operators are already required to conduct AML assessments of their business and develop and implement stringent AML policies.

The Proceeds of Crime Act 2002, meanwhile, requires operators to continually monitor and evaluate gambling activity by one customer within different parts of the business over time, in order to spot indicators that might suggest money laundering.     

Spat with the Government

The Association of British Bookmakers ABB, which had lobbied for exemption, welcomed the decision this week. Many bookmakers had been fearing the worst.

“The ABB believes that the Treasury has come to the right decision with regard to the risk relating to money laundering in high street betting shops,” it said in a statement.

“ABB members will continue to focus on ensuring land-based operators remain low risk in relation to money laundering, both through direct action and engagement with relevant regulators and industry bodies such as GAMLG [Gambling Anti-Money Laundering Group].”

The ABB is currently at loggerheads with the government over plans to reduce the maximum stakes on fixed odds betting terminals from £100 ($123) per spin (every 20 seconds) to just £2 ($2.46). The industry body has claimed such a move would cause 20,000 job losses and threaten half of the nation’s bookmaking shops with closure.   

It would also have an adverse effect on the racing industry, which would lose £100 million ($123 million) a year in media rights and racing levy contributions, says a report by KPMG on behalf of the ABB. The government would lose £1 billion ($1.2 billion) in taxes, and meanwhile the bookmaking industry would be “devastated,” claims the report.