Emerging money laundering risks: Gambling

 

On 2 October 2025, the UK's Gambling Commission published its latest Emerging Risks (the Emerging Risks Briefing), with a focus on risks associated with pre-paid payment methods. Whilst not a new topic, having been detailed in 2020 and 2022 updates, the Emerging Risks Briefing reiterates pre-paid payments as high-risk, covering cards, vouchers and all other pre-paid payment methods.

 

Operators are reminded of their licence conditions and code of practice obligations to keep up to date with emerging risks published by the Commission and to review their risk assessments, related policies, procedures and controls.
This briefing summarises the Emerging Risks Briefing, alongside exploring the parallels with the UK’s new 2025 National Risk Assessment (National RA) and other intersectional financial crime risks.

 

The pre-pay challenge

Building on the April 2025 emerging risks briefing, the Gambling Commission flags the high-risk assessment for pre-paid payments based on:

• customers being able to pre-pay/load cash and cryptoassets directly or via third-party websites (see the April Emerging Risks briefing (here) for further crypto risks commentary);
• the anonymous nature of certain pre-paid payment methods;
• the ability to pre-pay using credit cards, noting Licence Condition 6.1.2(1) prohibits gambling payments via credit cards; and
• the lack of traceability and open-loop nature of many pre-paid methods, which do not allow deposits back onto the card or voucher.

 

Actions for Operators

As ever, the Gambling Commission sets out steps for operators to mitigate the risks:

• Risk assessments: all payment methods, whether cards, vouchers or otherwise, should be within operator's risk assessments with mitigations, factoring in the Gambling Commission's own risk assessment (here).
• Customer profiles: tailored and risk-based due diligence should be conducted, with business risk assessments informing what further information may be requested for higher risk customers. Mandatory information for high-risk customers should trigger enhanced due diligence, including source of wealth and source of funds evidence (and independently verified, where appropriate).
• Key event information: Licence Condition 15.2.1(8) mandates the submission of key event information to the Commission where there are changes to methods and/or payment processors through which operators accept payments from customers. Such submissions should detail the type of payment method, the provider, and how the payment method was risk assessed.

The Emerging Risks Briefing also reminds operators that sufficient customer checks must be carried out. They must be alert to the risks of third party payment processors conducting KYC checks on their behalf and using third parties for gathering wider information, such as source of funds generally, without further scrutiny.

Operators remain ultimately accountable for conducting KYC checks under their regulatory and money laundering obligations.

Businesses should not accept credit cards for gambling, including via a Money Service Business (MSB) and, by extension, pre-payment methods are not to be used to circumvent the restrictions on credit cards. Operators should also note MSBs are, in turn, assessed as high risk for money laundering purposes under the latest 2025 National RA (see further below).

The risk assessments, profiling and customer checks referred to above emanate from the need to mitigate the risk of money laundering. However, they may also be invaluable evidence of compliance should a gambler challenge the operator on whether it had discharged its obligations under the Social Responsibility Code in relation to responsible gambling.

 

National RA

Operators should also consider the wider UK National Risk Assessment of Money Laundering and Terrorist Financing, which was published in July 2025.¹ Aiming to provide a clear and comprehensive picture of current and emerging risks, the National RA cross-refers to a range of cross-cutting economic crime developments and see our insight post here.

The National RA has upgraded the money laundering risks of casinos to medium and, in particular, flags the continuing high-risk of pre-paid cards, given the ease with which they can be used cross-border and the vulnerabilities to the placement of criminal funds and concealed origins via layered transactions.

The National RA has also maintained a high-risk rating for MSBs, with specific commentary regarding Casinos offering MSB services. The reasons for this are clear given the global reach of money remitters, the speed of transactions, the ability to engage in one-off transactions and the reduced transparency regarding the origins of cash, all of which are attractive for criminals.

Operators will need to map their anti-money laundering (AML) frameworks across a range of business activities to ensure up to date risk assessments inform their policies, procedures and controls across their businesses. This extends beyond their day-to-day operations, also considering the risks in their product development, third party relationships, mergers & acquisition due diligence and other ad hoc contexts, alongside intersectional risks with other financial crime areas such as fraud and tax evasion.

Operators should also consider their wider risk environment for anti-fraud purposes, with the new failure to prevent fraud offence having just come into force on 1 September 2025 - see here for our commentary.

If you wish to discuss your organisation's approach to tackling money laundering, or wider financial crime risks, please do not hesitate to contact us.

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¹ HM Treasury, National Risk Assessment of Money Laundering and Terrorist Financing 2025, July 2025. Available here.