Security and gambling sector: ‘costly’ directive gains ground

OPERATORS in the gaming and gambling sector are on average 66 percent of the way through their fifth anti-money laundering directive (5MLD) implementation programmes.

That puts them ahead of other regulated sectors, according to research conducted by LexisNexis Risk Solutions.

Gambling sector 5MLD
Image by Greg Montani from Pixabay

Almost half of firms predict a regulatory clampdown, which suggests repercussions in the case of non-compliance. The controls came into force in January 2020.

Full compliance requires significant investment for the gaming industry, with operators expecting to spend on average £1,016,200 — the highest figure for all regulated sectors, including real estate, banks, lenders, wealth management, and accounting.

But 61 percent of firms expect 5MLD to have a positive impact on their ability to detect and prevent crime. Some 25 percent are more sceptical, and believe regulators would do better to champion the use of networked data sources and AI.

Overall, firms indicate that they need more regulatory support; 83 percent of compliance professionals canvassed want better guidance. Over 75 percent of UK firms expect the gambling sector to be targeted with more regulation as a result of Brexit.

LexisNexis spokesperson Nina Kerkez says the gambling industry’s “collective optimism towards regulation, undaunted by the high cost of compliance” is probably a recognition of the potential benefits.

“If anything is going to help us make significant inroads in the fight against financial crime, it is better collaboration between the regulator, the government, and the private sector,” she said, “with the adoption of data and technology-driven solutions.”