The UK Government has increased the money laundering risk for casinos amid the rising popularity of online gaming.
The Treasury and Home Office cite “changes in customer, geographical and transaction risks” – in particular, an increase in funds moving through remote casinos driven by the COVID-19 pandemic – for increasing the money laundering risk level for casinos from ‘low’ to ‘medium’.
The shift comes in the UK’s National Risk Assessment of Money Laundering and Terrorist Financing 2025 report, which also reports that the risk posed by terrorist financing from casinos remains low, as it was in 2020.
According to the report, published on 17 July, income from remote casino slot games has risen by 52% since it was last published in 2020, from £2.3bn to £3.6bn, with more players reportedly gambling for longer periods.
“The increased scale and volume of slot gaming, when combined with risks of non-face-to-face business relationships and the noncompliance with customer due diligence requirements by some casinos, increases the risk of money laundering and terrorist financing,” the report states.
The most common occurrence of money laundering through licensed casinos was recreational spending of criminal property. However, instances of criminals attempting to ‘clean’ funds through casinos were also observed throughout the assessment period.
In particular, high-end non-remote casinos have the highest proportion of international ‘politically exposed persons’, including those from higher-risk jurisdictions, which increases the risk of exposure to corruption.
Suspicious activity reports (SARs) submitted between 2022/23 and 2023/24 rose by 26%, from approximately 6000 to 7500. However, the report notes that this increase could be attributed to the industry developing improved resources to detect suspicion and improved reporting practices and training.
In the 2023-24 reporting period, 25% of casinos assessed by the UK Gambling Commission (UKGC) were found to be non-compliant, and 25% were found to be “generally compliant”. The remaining 50% of the casinos were found to be compliant.
However, compliance with customer due diligence (CDD) and enhanced due diligence (EDD) requirements declined between 2023 and 2024. In 2024, assessments identified that 12.5% of casinos inspected were not compliant with all CDD requirements, and 41% were not applying EDD requirements.
These figures increased from 7% and 11% respectively, in 2023.
Diving deeper into the potential vulnerabilities facing the UK casino industry, the report highlighted the potential danger posed by white label agreements for remote casinos.
“There have been cases where insufficient due diligence has been carried out on these third parties,” says the report.
“Historically, some white-label arrangements included gambling operators relying on unlicensed third parties for elements of their compliance approach. In these cases, the licensee would remain responsible for compliance, although they did not always have sufficient oversight.
“These arrangements are now less common, but risks remain where white-label providers offer large numbers of websites, as failure by a single remote casino to control the ML risks relating to their white-label partnerships can impact a significant number of websites.”
These fears were brought to the forefront in May when significant anti-money laundering shortcomings led TGP Europe to abruptly depart the UK following a UKGC investigation.
Before its UK departure, TGP Europe’s business model centred on Asia-focused brands, such as DEBET, and the Isle of Man-based SBOTOP, operating in the UK by utilising the TGP Europe White Label.
However, the UKGC issued TGP Europe a £3.3m penalty for failing to carry out sufficient checks on business partners, as well as for breaches of AML rules.
This included failing to carry out due diligence checks, failing to consider money laundering risks, failing to consider that any activity by third parties may have been illegal, and failing to implement due diligence measures outlined in its own AML policies.
Alongside white label agreements, the report also issued a stark warning against the dangers unlicensed casinos present related to money laundering concerns.
The report states that illegal casinos are continuing to attract new customers by heavily targeting online advertising.
Due to operating outside UKGC guidelines, these operations are not required to implement money laundering controls and, as a result, “criminals could use illegal casinos to launder money” or “could be run by criminals and be used to launder their criminal funds”.
To counter the black market, the state issued 1,158 stage one cease and desist notices in relation to illegal casinos between April 2024 and March 2025, according to the report.
The UK regulator also referred 118,181 URLs to Google and Bing, and had 81,292 URLs which prompted the landing pages of illegal casinos to be removed from search engine results.
Looking to the future, the report highlights the danger of increasingly sophisticated AI to produce identification documents that can bypass CDD checks.
In addition, it suggests that the rising popularity of crash games on licensed platforms may offer a new opportunity for money laundering.
Due to the mechanics of the games, which require a player to cash out their stake before the game ‘crashes’, there is an incentive for legitimate players to cash out quickly with limited gameplay in a similar fashion to those attempting to use the games for money laundering purposes.
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