KPMG Forensic is warning that the gaming industry in the United Kingdom could become an increasingly popular conduit for money laundering if the U.K. government doesn't employ more stringent controls for casinos.
The government claims in its report, "A Safe Bet for Success - Modernizing Britain's Gambling Laws," due to be released to the public next month, that the country's gambling laws are in dire need of modification to maintain proper regulation of the industry.
Money laundering was one of the many concerns addressed in the U.K. Gambling Review Body's recommendations made last summer in a report headed by Sir Alan Budd. In the report, the panel made 176 recommendations for changes to the current system of control; the government has moved to employ 157 of the recommendations. Among many things, the report called for the simplification of regulation and a means of responding flexibly to future technological and market developments.
Adam Bates, Head of KPMG Forensic said changes can't come quickly enough. "These days fewer and fewer businesses can accept cash in significant quantities without raising concerns," Bates explained. "A casino, in which clients can walk in with a pile of cash at the start of the evening and out with a casino check at the end, must still represent a potential weak spot in the fight against money laundering"
He added, "What is needed to fight the global menace of money laundering is a joined-up approach in which all investigating and intelligence agencies, regulators, industry bodies and businesses recognize their common interest in making sure that the U.K.'s high reputation as a financial and business center remains."
U.K. casinos are not subject to the 1993 Money Laundering Regulations and therefore are not required to identify their clients and keep records specifically for anti-money laundering purposes. Although the gaming in has historically been closely regulated in England, the government feels money laundering has become a legitimate threat.
"Stringent initial checks on the background of the owners and operators of casinos, commensurate with those applied in certain parts of the financial sector, together with ongoing monitoring of operators should help address these concerns," Bates explained.
British casinos have for many years been disclosing their suspicions about possible money laundering activity to the National Criminal Intelligence Service (NCIS). According to NCIS's annual report covering 2000, the most recent report available, 300 disclosures (1.63 percent of the total disclosures) were received during the year from the gaming industry. No figures are available on how many of the disclosures resulted in prosecutions or the confiscation of assets derived from crime.
"The government's forthcoming reforms of the gambling industry will give us another indication of how seriously they are prepared to take the threat that money laundering and organized crime might get more of a foothold in this country," Bates said.