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New advice to help smaller gambling businesses comply with Proceeds of Crime Act

The Gambling Commission (the Commission) last week published advice for gambling operators and a short leaflet aimed specifically at small businesses to enable them to comply with the Proceeds of Crime Act 2002 (POCA).

It is a requirement of POCA that all gambling businesses identify, assess and minimise the risk of customers using money obtained illegally (the proceeds of crime) to gamble in their business.  Additional requirements are made of casino businesses under the Treasury’s anti-money laundering regime.

Where such activity is suspected, operators must report their concerns to the Serious Organised Crime Agency (SOCA) via a Suspicious Activity Report. Failure to report known or suspected money laundering activity may result in prosecution.

The Commission’s Deputy Chief Executive, Tom Kavanagh said:

“Many businesses can be targeted by criminals seeking to spend the proceeds of crime including small gambling businesses.

“The purpose of the two advice documents is to help gambling operators get the right processes in place under the Proceeds of Crime Act.”

Duties and responsibilities under the Proceeds of Crime Act 2002 - advice to operators (excluding casino operators) - September 2009

Proceeds of Crime Act 2002 - Information for small businesses - September 2009

Notes to editors

The Gambling Commission

  • 1. The Gambling Commission (the Commission) regulates gambling in the public interest.
  • 2. The Commission’s objectives are: to prevent gambling from being a source of crime or disorder, being associated with crime or disorder or being used to support crime; to ensure that gambling is conducted in a fair and open way; and, to protect children and other vulnerable people from being harmed or exploited by gambling.
  • 3. The Commission is responsible for licensing and regulating all commercial gambling in Great Britain other than the National Lottery and spread betting, which are the responsibility of the National Lottery Commission and the Financial Services Authority (FSA) respectively.
  • 4. The leaflet and further advice is available here and at http://www.gamblingcommission.gov.uk.
  • 5. Trade associations such as the Association of British Bookmakers have also produced advice for their members on this issue.
  • 6. Money laundering is any action taken to conceal, arrange, use or possess the proceeds of any criminal conduct. Criminals try to launder 'dirty money' in an attempt to make it look 'clean' in order to be able to use the proceeds without detection and to put them beyond the reach of law enforcement and taxation agencies.
  • 7. There are numerous things that can make someone either know or suspect that they are dealing with the proceeds of crime.  Some common examples of how suspicions may be raised are listed below, although this is not an exhaustive list and there may well be other circumstances which raise suspicion:
  • a. A man convicted of dealing in drugs is released from prison and immediately starts gambling large amounts of money.  He is known to be out of work and other customers inform staff that he is supplying drugs again.  This will give rise to the suspicion that he is spending the proceeds of his criminal activity.
  • b. Stakes wagered by a customer become unusually high or out of the ordinary and the customer is believed to be spending beyond his or her known means.  This requires some knowledge of the customer but, nevertheless, there may be circumstances that appear very unusual and raise the suspicion that he or she is using money obtained unlawfully.  It may be that the customer lives in low cost accommodation with no known source of income but nonetheless is spending money well above his or her apparent means.  There is no set amount which dictates when a disclosure should be made and much will depend on what is known or suspected about the customer.
  • c. A customer exhibits unusual gambling patterns with an almost guaranteed return or very little financial risk.  It is accepted that some customers prefer to gamble in this way but, in some instances, the actions may raise suspicion because they are different from the customer’s normal gambling practices.
  • d. Money is deposited by a customer or held over a period and withdrawn by the customer without being used for gambling.  For instance, suspicions should be raised by any large amounts deposited in gaming machines or gambling accounts that are then cashed or withdrawn after very little game play or gambling.
  • e. A customer regularly gambles large amounts of money and appears to find an unusual level of losses acceptable.  In this instance, the customer may be spending the proceeds of crime and sees the losses as an acceptable consequence of the process of laundering the proceeds of crime.
  • f. Operators are advised that instances of high spend by customers that lead to commercial risk for the operator may also indicate suspicious activity.
  • 8. Failure to submit Suspicious Activity Reports could lead to action against an operator under POCA. Evidence that an operator was willfully avoiding its legal duties could also lead to regulatory action by the Commission.

Further information

Further information is available from the Commission’s website.

Press enquiries to John Travers on (0121) 230 6700 or communications@gamblingcommission.gov.uk

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