New anti-money laundering laws took effect in the United Kingdom on March 1. The new regulations are expected to affect businesses that handle a large amount of other people's money, including accountants, antique dealers, auction houses, car dealers, casino operators, estate agents, jewelers and lawyers. These and other high-cash businesses are required to register with Customs and Excise. They are also required to report "suspicious" activity to the National Criminal Intelligence Service, meaning they will have to consider whether customers paying by cash are evading taxes or participating in other criminal activity.
Land-based casinos fit the requirements for businesses that are surely going to be affected by the measures, but what about online casinos and betting companies?
We asked Elle Todd, a solicitor for the Olswang law firm in London:
How will England's new anti-money laundering regulations affect the country's online betting companies? What about betting companies from other jurisdictions?
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"Betting entities, including online betting companies, are not yet specifically covered by the money laundering regulations, although the government is exploring further regulation in this area pursuant to the recommendations of the Budd Report."
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Elle Todd: The pertinent sections of the Money Laundering Regulations 2003 came into force on 1 March, 2004. The effect of these regulations is to extend the categories of regulated activities to encompass the operating of casinos by way of business and those accepting cash of 15,000 euros or more in a single transaction (meaning that they will now need to incorporate internal reporting, control, customer identification and record keeping systems, to appoint a compliance officer and undertake staff training). This will not, therefore, affect online betting unless such large transactions are taking place.
Betting entities, including online betting companies, are not yet specifically covered by the money laundering regulations, although the government is exploring further regulation in this area pursuant to the recommendations of the Budd Report.
It should be remembered, however, that online betting companies are, of course, subject to the same general money laundering laws as all other companies. The Proceeds of Crime Act 2002 (the relevant sections of which came into force on 24 February 2003) is non-industry specific. The primary money laundering offenses in this act (including any such activity that takes place in the United Kingdom) are:
- concealing, transferring, etc criminal property (e.g. the proceeds of crime);
- making arrangements which facilitate the acquisition, use, etc of criminal property;
- acquiring, using or possessing criminal property;
- tipping others off about money laundering investigations; and
- not disclosing suspicions (whether actually held, or which there were reasonable grounds to have, whether or not actually held) of money laundering to the relevant authorities.
The last of these is particularly important for online betting companies to be aware of, although this is not a new obligation.
Elle Todd joined Olswang in 2000 after graduating from Cambridge University. She works in Olswang's Media, Communication and Technology Group advising on a range of new media, technology, e-commerce and privacy matters. In addition, Elle is involved in a range of betting and gaming matters, both commercial and regulatory.