British Gambling Commission issues warning over AI deepfakes and crypto crash games
The British gambling regulator has updated its money laundering and terrorist financing guidance.
UK.- The British Gambling Commission has updated its anti-money laundering and terrorist financing guidance to highlight what it sees as newly emerging risks for the sector. One trend it flags up is the use of artificial intelligence to bypass due diligence checks.
The regulator said criminals were using AI to create false documents, deepfake videos and face-swap images and videos to facilitate money laundering. As a result, it says that gambling operators must train staff to be on the alert for AI-generated documents submitted for due diligence purposes.
Another concern is an increase in reports of criminals offering people money for their personal details in order to open mule accounts. The Gambling Commission warned that there was a risk that accounts were being opened using paid-for personal details and that users may be acting as unlicensed betting intermediaries.
Alert over crash games
The regulator said it was aware that the growing popularity of crash games offered by unlicensed crypto casinos was attracting interest from licensed operators. It warned operators to exercise caution in this area and to treat crypto assets as high risks for money laundering. It said operators should be alert for reports of cryptocurrency thefts, which thieves may try to launder through gambling platforms.
It said: “There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game and that transactional monitoring controls may not be effective in detecting suspicious activity.”
It advised operators to implement procedures to identify suspicious wagering patterns in crash games.
Unlicensed money service business
The Gambling Commission has also warned that it has identified some casinos, both land-based and online, providing money service business (MSB) facilities, including foreign currency exchange, third-party cheque cashing and third-party transfers.
It said that customers using MSB facilities should be deemed high risk and subject to enhanced customer due diligence checks. It told land-based casino operators to ensure they use closed-loop payment processes.
It also warned operators to be alert to customers who try to deposit foreign currency in large denominations, including €500 bills. It said it had become aware of several cases.
“The sale of high-value notes, in any currency, entails a significant money laundering risk and any request to buy or sell €500 notes or quantities of other high-denomination notes should be treated as high risk,” the regulator said.
Under British licence conditions, operators are required to keep up to date with money laundering threats. The Gambling Commission recently fined The Football Pools and Corbett Bookmakers over AML failings.
The regulator has also warned of games offered by licensed operators appearing on unlicensed websites. It has warned licensees to ensure that supplier partners are not providing content for illegal sites and to terminate their relationships if they are found to have done so.
It said: “It is crucial that licensees also engage proactively with the Commission when such activity is detected, providing details of the preventative measures taken to ensure the activity ceases without delay.”
