From casinos to betting apps – why gambling and gaming is a prime target for money laundering

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In the TV series Ozark, millions of dollars are laundered through a casino, made to look like legitimate business. And while this is a fictitious show, the premise is certainly based on truth, because the gambling and gaming industry historically has – and still is – a prime target for money launderers.

Why? In the case of casinos, it is all about cash. Cash is used extensively in casinos, with huge sums coming in and out, while the multiple layers and channels – including chips, tickets, gaming machines and accounts – make it easy for money to be moved around.

Over the past few years, there has been a huge shift from in-person gambling to app-based bets, so meaning that the risk of cash-based money laundering is becoming less of an issue.

However, in its place is the even bigger issue of app-based money laundering. The recent explosion of online gaming and gambling apps has created a whole new opportunity for money launderers.  Criminals are able to manipulate gambling apps in a number of different ways, including funding their legitimate online gambling accounts from a multitude of illegitimate payment options and working with each other within the games and bets to manipulate results and move money around within the apps.

The key to preventing most money laundering schemes is proper due diligence, as, more often than not, it is a lack of proper checks that enables fraudsters to use gambling firms to clean their dirty cash and the gambling and gaming industry is under a legal obligation to have proper anti-money laundering processes in place, this includes:

  • Identification and verification of all customers

  • Source of Funds checks and bank account validation

  • Screening for sanctions and PEPs, with enhanced due diligence where any risk is identified

  • Ongoing monitoring of all customers

  • Reporting anything suspicious to the relevant regulatory bodies

However, it can be incredibly difficult for gambling and gaming firms to put reliable and robust checks in place, without creating an intrusive and off-putting onboarding process that puts customers off from signing up. However, there are huge reputational, legal and financial consequences of not having proper checks in place.

In 2022 alone, the Gambling and Gaming Commission sanctioned 16 firms and settled with a further eight, many of which were for AML failures – the most notable include:

  • AG Communications was fined £237,600 in November for anti-money laundering (AML) due diligence failures

  • In October, NSUS Limited – which trades as GGPoker – was fined £672,829 penalty for social responsibility and anti-money laundering failures, namely failing to conduct adequate risk assessments

  • In August, Spreadex was fined £1.36m for AML failures, specifically allowing customers to make bets of more than £360,000 without Source of Funds being sufficiently established

  • Also in August, Entain Group paid £17m for AML failures at both its online and land based businesses, including £3m for failures at its Ladbrokes Betting & Gaming Limited operation for ‘completely unacceptable anti-money laundering and safer gambling failures’

  • In February, BV Gaming – which runs,,, and – was fined £2m for not meeting AML risk assessment standards

The easiest way for gambling operators to ensure their AML compliance is up to scratch, so they can prevent money laundering and protect their businesses from penalties for noncompliance – is to use an electronic verification system.

SmartSearch offers the highest match and pass rate on the market, enabling firms to identify, verify and screen customers at the click of a button, and uses facial recognition technology, bank account, IP address and device validation for multi-layer validation and security. Benefits of SmartSearch’s award-winning AML platform include:

  • A comprehensive range of anti-fraud services, ID verification and bank, mobile, IP address and device validation

  • Solutions that can be tailored to meet the needs of your firm

  • It can be integrated with your existing onboarding process for a quick, secure and non-intrusive sign-up process

  • The system is continually updating in line with global regulations to ensure ongoing compliance

If you want to find out more about how SmartSearch can help you protect your firm from money launderers and meet your AML obligations quickly, efficiently and affordably, James Langrick and Zowie Lees-Howell , members of SmartSearch’s Enterprise team, will be at ICE Totally Gaming 2023 on the 7-9th February.

James and Zowie would be more than happy to talk to you about the benefits of integrating SmartSearch into your firms’ onboarding system - book a chat with them here


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