Anti-Money Laundering Guidance for Gaming and Gambling

As the gambling industry was replaced by online games and with the rise of these online games, it brought rich opportunities not only for players and operators but also for a crime. With the evolution of this industry and the enrichment of crimes, international AML laws, and local gambling regulations are becoming stiff.

Gambling sectors, which are adversely affected by the closure of buildings and job losses due to the corona process, continue mostly online. This brought new risks with it. Gambling Enterprises discusses whether this requires updating the money laundering and terrorist financing risk assessment.

Money Laundering and Terrorist Financing in Gaming and Gambling

Financial criminals target gaming and gambling businesses for money laundering. Gaming and Gambling can also be used to launder funds obtained from criminal activities in general. Criminals can abuse the system by hiding the link between the funds created. Gaming and gambling businesses have a responsibility to keep money laundering and terrorist financing off their businesses. All gambling companies are subject to the Proceeds of Crime Act (POCA), which also has anti-money laundering rules. The gaming and gambling industry has to comply with the directives and regulations of Moneyval, FATF, and the European Union. Also, this gaming and gambling have to have a comprehensive compliance program to prevent money laundering, thanks to this compatibility program they can be protected from potential criminal activities in businesses.

The Rising Risk of Money Laundering for Money Mules

Mule Accounts are an increased risk of financial crime especially for the retail banking sector in order to facilitate crime revenues. However, this risk may be a risk not only in the retail banking sector but also in the gambling industry. Financial criminals target online scams and fraud with Mule accounts. It achieves these goals by breaking the audit of transactions and complicating any investigation by transferring illegal funds from a third party’s bank mule account.

With the increase of their online games, this risk increases, and according to research, most of the money mules consist of young men. The gaming and gambling industry should also take action to increase money mules. Opening a gambling account with a minimum deposit, initially for this activity, is a red flag indicator. Moreover, Due to these risks, it became even more important for the gaming and gambling industries to perform customer identity and comprehensive funding controls during customer registration.

Risk Assessment and Risk Management

The main purpose of the risk assessment is to identify or reduce the risk sources after assessing these risks. As a result, the gaming and gambling industry can adapt to AML / OFAC compatibility programs. Many indicators are used, such as customer types used during the risk assessment and geography risks. These indicators can reduce money laundering and terrorist financing in gaming and gambling businesses. It is very important to have a risk-based approach when conducting a risk assessment. As a result of the risk assessment performed, internal policy and procedures should be implemented in the gaming and gambling industry.

When dealing with customers, the purposes of money laundering and social responsibility should also be taken into account. Regulations should be reviewed, and legal obligations should not be risked when managing risks. In the gaming and gambling industries, they should not be exposed to unnecessary and unacceptable risks for the ability to manage and comply with regulations effectively.

The Requirement of Risk-Based Approach for Gaming and Gambling Industries

An assessment of the money laundering and terrorist financing risks faced in the gaming and gambling industry should also be made, and in the light of these assessments, internal policies and procedures should be managed. A risk-based approach is required when making this assessment and management. So what is meant by a risk-based approach?

Any customer coming in the gaming and gambling industry should be screened to measure the risk level than these scans should be performed for the same customer in regular periods. Sanctions lists, PEP lists, and adverse media data are very important for organizations because these lists pose a great risk. When applying a risk-based approach, customers are individually categorized according to their risk levels, and if the customer carries a higher risk, this person will receive more AML reviews.

Regulations in the Gaming and Gambling Sector in the World

The US

States where gambling is legal in the United States also have their own regulators. FinCen is the authority obliged to supervise the regulations here. There are two laws in the US Gambling regulations, the first is The Interstate Wire Act, and the other is The Unlawful Internet Gambling Enforcement Act.

The European Union (EU)

In the EU, the 4th and 5th Anti-Money Laundering Directives (AMLD) are a common regulation for all European countries, but each EU member country has its own regulators. EU member states are required to comply with these AML regulations.


It has its own regulations in all states and regions of Australia. Although there is no single binding regulator, Australia is the gambling jurisdiction with one of the world’s strictest compatibility requirements.


Gaming and gambling are legal in Cyprus. The regulations of the gambling industry are different, and the regulations here are regulated by The National Betting Authority (NBA).

4th and 5th EU AML Directive for Gaming and Gambling Industries

In 2015, the EU Commission comply with the 4th Anti-Money Laundering Directive to help combat money laundering and terrorist financing in the EU. This directive was not perfect for the gambling industry, so it decided to extend the 5AMLD EU directive to cover the gambling industry. In general, there are applications where the purpose of these directives suggests compliance with the AML program in the financial sectors, including the game and gambling industry, such as Know Your Customer (KYC), Customer Due Diligence (CDD).

With these practices, countries comply with the directives. In the rest of our article, you can find out what these applications mean in the gaming and gambling industry. Most gambling regulators are tasked with monitoring and auditing AML compliance.

Customer Due Diligence for Gaming and Gambling

In the gaming and gambling industry, Customer Due Diligence application is used to collect information about customers and to scan and evaluate this information. After this evaluation, the customer’s existing risks are determined, and an action step is taken accordingly. Customer risks can be reduced with CDD. When making a Customer Due Diligence (CDD), information such as the full name, nationality, marital status, age, and contact information of the customer is collected. Then ID is scanned so that the risks are scanned. CDD is a Know Your Customer (KYC) procedure.

AML Name Screening Software

CDD data should be stored for five years after the end of the business relationship with customers. Still, this period can be extended up to 10 years if the legislation deems it necessary. If these transactions also have more risky transactions or if there are more risky customers then Enhanced Due Diligence (EDD) application is used.

Enhanced Due Diligence (EDD) for Gaming and Gambling

Enhanced Due Diligence is a Know Your Customer (KYC) procedure. It is used to detect risks that cannot be detected by the CDD and to scan more risky customers. High-risk customers can have negative consequences for the gaming and gambling industry. EDD can be used to prevent this, reduce risks, and reduce money laundering and terrorist financing in the industry. Politically Exposed Persons (PEPs), their family members, and partners are considered high-risk customers and in particular, EDD should be applied to these people. With EDD, the AML Compliance program can be complied with, and penalties can be avoided while operating a reputation can be maintained.

You can click to get detailed information about Politically Exposed Persons (PEPs).

Sanction Scanner Solutions For Gaming and Gambling

Industries With the online gaming and gambling industry, the customer can open an account on the gaming and gambling platforms in seconds. Organizations have to comply with AML requirements while performing a quick customer account opening process to ensure customer satisfaction. With its powerful API support, Sanction Scanner automatically performs all AML control processes of organizations from customer account opening to customer money transfer transactions within seconds. Sanctions Scanner has a global database of sanctions, PEP, blocked persons, and searched lists. The database of the Sanction Scanner is updated instantly. Organizations can check their customers 24/7 in this database.

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