UKGC Publishes Proposed Changes to LCCP – Urges Operators to Take Part in Consultations

The UK Gambling Commission (UKGC) has published the proposed changes in the Licence Conditions and Codes of Practice (LCCP). The changes are related in particular to the Commission’s duty to keep gambling in the country free from crime or from having any links to elements of crime. As The Commission’s initiative for implementing such changes is now in the consultation phase, the UK regulatory body is urging members and operators to take part in the consultation proceedings.

The Gambling Commission states that changes in customer preferences and latest developments in technology pose as new challenges not only to its mandate of keeping the elements of crime out of gambling, but also to its duty of offering new solutions in addressing crime-related problems.

The UKGC added that the consultation gives everyone an opportunity to voice their opinions on a number of critical questions, and on emerging yet debatable issues such as the use of virtual coins or digital currencies. The Commission also wants to hear about the actual experiences and best practices observed by licensee operators in keeping gambling out of crime’s reach.

Based on the published proposed LCCP changes, the British regulator considers that crime can be associated to operators in different ways, including instance when the operators are themselves, the victims of crime.

In some cases money derived from criminal activities are spent for gambling, and from which licensee operators tend to benefit unknowingly and financially. In other cases, members of organised crimes or syndicates could seek to acquire gambling businesses to use for money laundering purposes.

Accordingly, such risks could be addressed by way of proper and adequate investigations during the licensing stage.

Proposed Changes to Licensing Conditions (Mandatory):

Licensee operators must:

• Notify the UKGC in the form or manner prescribed and within five working days, about a criminal investigations conducted by any law enforcement agency involving the licensee operator, or employees, and/or a third party using the licensed gambling facility.
• Perform and submit an appropriate risk assessment report of their business being utilised for money laundering. The assessment should undergo review and revision annually, in view of continuing changes in technology, products, payment methods, and customer demography.
• Take reasonable steps to identify and keep track of the gambling activities of customers whom the licensee identified as posing heightened money laundering risks.
• Notify the Commission about instances when a licensee operator had discontinued business with a customer, as result of a decision that such customer presented money laundering risks.
• Must implement policies and controls pertaining to the usage and acceptance of cash and cash equivalents as payment, all aimed at minimising risk of crimes related to money laundering, and other illicit activities.

In conjunction with the proposed changes to licensing conditions, the UKGC also introduced changes to codes of practices. The changes are recommended best practices for strengthening licensee operators’ policies and control measures in minimising risks of their business being used for money laundering and other criminal activities.

The consultation proceedings will end on December 30, 2015. The UKGC expects to introduce the proposed amendments, following a review of all responses and recommendations received and after observing a three-month notification period prior to the implementation of the proposed changes.