Did the industry ever catch the ball might be a more apt question. Anti-money-laundering regulations have been ramping up over the past 10 years. They’ve been a more frequent talking point across many regulated industries, but gambling often seems less forthcoming. 

Over the last month, the issue has become a bit of a theme among regulators. In France, the gambling regulator l’Autorité Nationale des Jeux (ANJ) recently reviewed anti-money laundering (AML) practices in the industry, identifying areas for improvement. 

These included tailoring risk analysis to specific verticals, as well as improving on and dedicating more resources toward compliance with anti-money laundering, fraud and terrorist financing measures. 

The regulator also had to highlight the need for operators to ensure their asset-freezing measures complied with the law and that they have processes enabling all staff to declare suspicious transactions. 

Lottery operator Française des Jeux and horse-racing monopoly Pari Mutuel Urbain were both targeted for recommendations that point-of-sale checks on retailers be increased. 

Likewise, in the Netherlands, de Kansspelautoriteit (KSA) warned licensees earlier this month that many were not sufficiently complying with their obligations under the country’s Money Laundering and Terrorist Financing (Prevention) Act. 

Having investigated the industry’s compliance with the Netherlands’ Money Laundering and Terrorism Financing Act, the Dutch regulator found that “various obligations are insufficiently complied with”. 

This was mainly attributed to not having proper oversight of the origins of player finances. The regulator found that operators were likely to make checks on deposits of only more than around €2,500 and urged them to do so at lower deposit levels, for the sake of improving both AML compliance and gambling-harm prevention. 

Again, the need to flag unusual transactions sooner came up, like the observations of the ANJ, suggesting there may not be sufficient comprehension of when to treat a particular transaction as suspicious or, more worryingly, insufficient will to do so. 

Two unnamed Dutch licensees have been selected for further investigation in response to the KSA’s latest findings. “If further investigation shows that shortcomings continue, the KSA can impose sanctions”, the regulator has warned. 

While some jurisdictions are attempting to tighten their compliance, Malta was last summer targeted by the Financial Action Task Force (FATF) – the G7’s AML and anti-terrorist financing unit – and placed on a grey list of countries exhibiting “strategic deficiencies” in AML compliance. 

With the gambling sector and financial services playing a key role in Malta’s economy, the former generating more than 9,000 jobs and €700m annually and accounting for 12% of national GDP, it was not the ideal scenario for either the government or the Malta Gaming Authority, which had pledged to reinforce its AML compliance with a new unit in 2019. 

So, why the heightened sense of concern among regulators? Well, it may have something to do with an updated AML package currently being drawn up in the European Union (EU), one which was introduced in July 2021 and sets out to create a single AML rulebook for the region and a new EU AML authority by January 2023. 

While the new rules will be focused on financial institutions, industries that have until now been subject to more limited AML supervision are likely to see a greater supervisory presence from the new AML authority, which will oversee the rules set by national regulators. 

It is set to be the EU’s biggest overhaul to AML and combatting the financing of terrorism (CFT). An EU-wide financial-intelligence unit will coordinate efforts under the AML authority and an extension to the scope of existing wire transfer regulations will see crypto assets, along with related service providers or payment providers, coming under new requirements. 

For the gambling industry, it is another layer of oversight in Europe, which at the moment may seem somewhat distant, but appears to already be creeping into the industry’s regulatory consciousness.