Five online casino companies could lose their licence to operate, after industry regulator the Gambling Commission warned they were not doing enough to stop criminals using their websites to launder money. The commission has written to 17 online casino companies, flagging up the “serious nature” of its findings on their controls against money laundering, terrorist financing and problem gambling.
The regulator said it was already considering a licence review for five of the firms as a result of its early findings, which could result in their permission to operate in the UK being revoked. In its letter to firms in the sector, the commission said it had identified failings not just in money-laundering controls, but also in social responsibility provisions designed to protect problem gamblers.
These included companies hiring money laundering reporting officers with no formal qualifications who were “unable to provide suitable explanations as to what constitutes money laundering”.
The commission said: “There was a general lack of understanding of how criminal spend could affect the business.”
It also said firms were not submitting enough information about suspicious activity to law enforcement agencies such as the National Crime Agency. Online casinos are also failing in their duty to intervene when customers were showing signs of problem gambling, the commission said.
The regulator said it had spotted customers showing signs of problem gambling, but that “this behaviour did not trigger a customer interaction” by the companies. It told them to improve their measures to protect customers and prevent money laundering, warning it may review whether five of the 17 operators should have their licence withdrawn.
Labour’s deputy leader, Tom Watson, who last year launched a party review of gambling policy, said: “This serious warning shows many online gambling companies acting as if money laundering and gambling addiction being facilitated on their platforms aren’t their problem.
“The Gambling Commission is right to demand immediate improvement. No firm that fails to take its responsibilities seriously should be allowed to hold a licence.”
The regulator’s chief executive, Sarah Harrison, said: “It is vital that the gambling industry takes its duty to protect consumers and keep crime out of gambling seriously.
“The Gambling Commission’s new strategy sets out our vision for a fairer and safer gambling market.
“The action we are taking to examine online casino operators’ compliance with money laundering and customer interaction requirements is just one example of how we will be relentless in turning that vision into reality.”
She said the commission was also looking at the online market, which accounts for a third of the UK gambling industry. The Remote Gambling Association, the trade body for online gambling firms, said: “Keeping crime out of gambling is one of the three licensing objectives and if the commission has identified failings in this area then it must take action.
“It would be wrong to prejudge the outcome of their investigations, but we would obviously want to work with them to raise standards wherever necessary.”