Callcredit Blog

The Impact of Anti-Money Laundering Regulation on Gaming

Credit Risk & Affordability Fraud & Verification

In the third of a series of blogs, we take a look as the key trends and market forces facing the UK gaming industry. Here we examine the impact of changes to the anti-money laundering regime.

Player accounts required

The clock is ticking for operators who will have to ensure they are prepared for The 4th Anti-Money Laundering Directive (4MLD) by June 2017.  The biggest impact in the UK is likely to be on land-based gaming. It is likely that for all betting activity, whether in high street bookies, at race courses and even possibly for purchasing lottery tickets in a newsagent or supermarket, an account will be required. This will allow operators to track behaviour of players across all channels resulting in a 360 view of player behaviour.

International screening for Politically Exposed Persons (PEPs) and Sanctions

Customer Due Diligence (CDD) may have to be reviewed by operators for players outside the UK.  If CDD threshold triggers are reduced, it will increase the number of players impacted.  Operators may be required to screen for Politically Exposed Persons (PEP) and Sanctions. This is likely to pose a challenge to operators who are unlikely to have been undertaking these checks on an international basis. Although this practice was common in the UK, in other jurisdictions it is unlikely to have been.

Joining up online and offline: tracking gaming behaviour across multiple channels

With an increased focus on understanding player behaviours, whether it be in relation to AML practice or making sure customers are gambling responsibly, operators will need a 360-degree view of all player behaviour – not just that taking place on their website. Tracking gaming behaviour across multiple channels is on the horizon. Facilitating this approach isn’t going to be an easy step for the industry as the tools to capture and access this level of data aren’t currently available.

Increased requirement for data recency

The major challenge that the 4MLD is likely to provide is the requirement for data recency; particularly that information operators hold for CDD purposes. This may mean that operators need to refresh data at least annually to meet regulatory requirements.

Self-exclusion at organisation level

The current processes undertaken by the majority of gaming operators in the UK for self-exclusion are unlikely to have much of an impact on any serious player who is intent on placing a bet. It may cause the player a mild inconvenience, however there are many easy routes to get around any exclusion currently in place. This could be walking into a different bookie or even simpler, merely typing in a different URL into a web browser. It looks like the UK Gambling Commission is planning to implement a national database that will centralise this information, which is expected to create a much more effective and responsible practice for self-exclusion. This type of solution is likely to be guided by some of the other models already in place in Europe such as that seen in Belgium. With gaming truly an international activity eventually there may need to be a global solution.

The major hurdle to implementing the requirements is the availability of accurate data that operators can use to take decisions without disrupting the customer experience.  If the processes imposed on the end user become too onerous and invasive there it is possible that some potential customers may decide not to proceed with their registration.  The technological barriers and cost of implementing the requirements is yet to be fully understood, but is likely to be a significant investment.

Author: Joe Bowerbank

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