UK Government Elevates Money Laundering Risk Level for Casino Industry
UK Government Adjusts Money Laundering Threat Level in Casino Sector
The UK government has increased the money laundering risk classification for the casino industry from low to medium. This decision reflects growing concerns regarding the complexity and volume of financial transactions occurring within online gambling platforms, where criminal methods continue to evolve to bypass existing controls. Additionally, unregulated black market operators remain a significant challenge despite enforcement efforts.
Key Vulnerabilities Highlighted in Recent Risk Assessment
The 2025 National Risk Assessment (NRA), released by HM Treasury, identifies remote casinos as particularly susceptible within the wider gambling industry. Factors such as heightened customer anonymity, cross-border financial flows, and emerging technologies compound regulatory difficulties. The report notes a 26% year-over-year rise in suspicious activity reports (SARs) from the casino sector, alongside a growing number of illegal online gambling sites targeting UK residents.
Several new threats have been flagged including the use of virtual private networks (VPNs), prepaid payment methods, third-party transactions, and the exploitation of white-label business models, which traditionally lack adequate oversight. Peer-to-peer poker and crypto-based gaming activities like crash games have also been recognized as potential avenues for money laundering and other criminal conduct.
Licensed casinos often see money laundering through the recreational spending of illicit funds, but there are also deliberate attempts by criminals to cleanse illegal proceeds within casinos.
HM Treasury report
Casinos providing money service business (MSB) activities, such as foreign currency exchange and third-party cheque processing, represent another vulnerable area. Although fewer operators now offer these services compared to previous years, those who do tend to attract higher-risk clientele and engage in complex transaction networks often linked to jurisdictions with elevated risks.
Ongoing Compliance Challenges Within Casinos
The HM Treasury report points out persistent deficiencies in customer due diligence (CDD), especially in non-online casinos where certain transaction thresholds may not prompt further investigation. A notable decline in adherence to enhanced due diligence (EDD) was also observed, with 41% of inspected casinos in 2024 failing to properly implement EDD procedures.
Casinos face increasingly sophisticated attempts to circumvent CDD protocols using forged documents, some of which are generated with Artificial Intelligence (AI).
HM Treasury report
Although the threat of terrorist financing through casinos remains low, the report stresses the importance of full compliance with mitigation strategies due to the diverse clientele, including politically exposed persons (PEPs) from higher-risk countries.
Meanwhile, the UK Gambling Commission continues to crack down on illegal gambling operations through robust enforcement and digital interventions. From April 2024 to March 2025, the regulator issued more than 1,100 cease-and-desist orders and removed about 81,000 links associated with unlawful casino activities. However, the growth in online gambling, emergence of cryptoassets, and use of AI-generated identities demand ongoing vigilance and adaptable regulatory approaches.