UK LEGAL
the need to understand both how customers fund their gambling activity and the source of funds for any loan or investment. More broadly, this also refl ects a greater focus on B2B licensees. Historically these businesses have often been regarded as presenting relatively limited money laundering exposure because they do not interact directly with customers, but the new risk assessment emphasises that software businesses can nevertheless be exposed through investments, business relationships and the provision of software to operators in multiple jurisdictions.
NEW FOCUS ON AI ENABLED FRAUD
The new risk assessment highlights risks associated with AI generated identities, deepfake videos, face swaps, altered identity documents and other AI-assisted circumvention of CDD measures. The Commission notes the increasing sophistication of methods used to bypass identity verifi cation using AI tools.
For remote operators in particular, who do not interact with their customers on a face to face basis, these are particular points to note. The Commission assesses these AI-related risks as of high likelihood to occur and high impact if they do occur, so it will be crucial for licensees to be able to demonstrate that they have put processes in place to mitigate the risks. These may include AI detecting software and staff training, as well as ensuring CDD processes do not rely solely on scanned documents.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffl es, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
INCREASED FOCUS ON CUSTOMER RISK PROFILING AND ONGOING MONITORING
New risks appear in the Commission’s assessment relating to both the initial onboarding of customers and ongoing monitoring. The onboarding risks include those associated with customers whose funds derive from third parties or cash-intensive businesses, who spend in a disproportionate way, or who are linked to criminal activity. For non-remote casinos, new risks also appear for customers who gamble at multiple premises to disguise their source of funds and those who use terminals to facilitate payments, as these funds may not be scrutinised as closely.
A new risk also appears for all customer-facing operators which relates to a lack of appropriate customer monitoring. For non-remote casinos, this includes risks associated with a lack of monitoring of customers where CDD has not been completed (as entry is allowed without formal identifi cation).
WHAT SHOULD OPERATORS DO NOW?
The Commission’s new risk assessment does not introduce any specifi c new requirements for operators, however licence condition 12.1.1 requires operators to review their AML risk assessment in light of any material changes, and to ensure their policies, procedures and controls take into account applicable learnings and guidelines published by the Commission.
The updated assessment therefore necessitates a review of operators’ own risk assessments, policies and procedures, and also provides a useful indicator of areas likely to receive regulatory attention in the future. Any upcoming compliance assessment is likely to include an evaluation of the licensee’s procedures to mitigate the newly identifi ed money laundering risks. Operators should ensure they are able to demonstrate not just that they have activity considered the Commission’s new risk assessment, but that they have implemented necessary amendments to their own documents, procedures and trained staff on the changes.
OCTOBER 2026 21
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