AML requirements for Bookmakers 

Under statutory instrument 487 of 2018, providers of gambling services became a class of designated person for the purpose of section 25(1)(j) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended. While up to that point, Private Members Clubs at which gambling was carried on were already designated, the statutory instrument made other providers of gambling services designated persons under the Act. This designation followed the carrying out of an AML risk assessment of the gambling sector in Ireland available here.

“Gambling services” in the SI has the same meaning as Directive 2015/849. Under article 3 of the Directive:

‘gambling services’ means a service which involves wagering a stake with monetary value in games of chance, including those with an element of skill such as lotteries, casino games, poker games and betting transactions that are provided at a physical location, or by any means at a distance, by electronic means or any other technology for facilitating communication, and at the individual request of a recipient of services; (emphasis added)

Under SI 487, the following are not considered gambling services in an Irish context. (a) poker games provided at a physical location other than a casino or private members’ club,

(b) lotteries within the meaning of the Gaming and Lotteries Act 1956 (No. 2 of 1956), and

(c) gaming machines (within the meaning of section 43 of the Finance Act 1975 (No. 6 of 1975)) or amusement machines (within the meaning of section 120 of the Finance Act 1992 (No. 9 of 1992)) provided in accordance with section 14 of the Gaming and Lotteries Act 1956.

To note: for the avoidance of doubt, where providers of gambling services are operating remotely but providing their gambling services in the State; then irrespective of the jurisdiction given as their registered address, they constitute designated persons under the Criminal Justice Act 2010, as amended, and they are required to comply with the Act.

Section 60 of the Act determines who the competent authority for anti-money laundering (AML) supervision of designated persons is. In the case of gambling service providers, as there is no dedicated regulator at present, this is the Minister for Justice.

Under section 108 of the Act, the Minister has delegated the competent authority role to the Anti-Money Laundering Compliance Unit (AMLCU) in the Department. The establishment of a dedicated Gambling Regulator in Ireland is currently being progressed. It is intended that the Gambling Regulator will become the competent authority for gambling services following establishment.

Responsibilities of Designated Persons:

The Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 as amended requires all ‘designated persons’ to guard their business against being used for money laundering and/or terrorist financing purposes.

To minimise this threat and to ensure compliance with legal obligations under the Act, gambling service providers are reminded of their key AML compliance obligations under the Act as follows:

• 30A Business Risk Assessment

A designated person should have a documented business risk assessment in place to identify and assess the risks of money laundering and terrorist financing in relation to the business activities. This assessment should be repeated yearly and approved at an appropriate senior management level.

 Where the business is part of a larger group, each branch should have its own business risk assessment that is specific or localised to it.

• Section 30B Customer or Transaction Risk Assessment
• 
  

A designated person shall identify and assess the risk of money laundering and terrorist financing in relation to the customer or transaction concerned, to determine the extent of customer due diligence to be applied. This exercise should have regard to the factors listed under section 30B(1) and the factors outlined in Schedule 3 and Schedule 4 of the Act where appropriate.

• 33    Customer Due Diligence 

A designated person shall identify and verify the identity of a customer prior to carrying out an occasional transaction with, for or on behalf of the customer. This means obtaining and retaining a copy of a valid photographic identification (passport or driving licence) and proof of address (via correspondence from a Government source or utility bill dated within six months). In the case of gambling service providers, the amount of money or the monetary value concerned

• paid to the designated persons by the customer, or
• paid to the customer by the designated person,

is in aggregate not less than €2,000.

Note that in the context of the aggregate €2,000 figure, gambling service providers should track a customer’s subsequent spend from when a €200 spend threshold has been reached. In addition, a designated person is required to establish from the customer the source of the funds for any such transaction(s).

The requirement for information in relation to source of funds is a standard obligation for customer due diligence applying in all cases under S.33(2) of the Act.

• 36A  Examination of background and purpose of certain transactions 

A designated person shall, as far as possible, examine the background and purpose of all transactions that are or appear to be:

• complex,
• unusually large,
• conducted in an unusual pattern or
• do not have an apparent economic or lawful purpose.
   
   
• 37   Enhanced Due Diligence

A designated person shall, as far as possible, determine if a customer is a politically exposed persons (PEP) or an immediate family member or a close associate of a politically exposed persons. In such instances, a designated person must conduct enhanced due diligence on the individual. The checks used to determine PEP status should be retained on file as part of the customer due diligence process and made available to AMLCU regulatory investigators at future compliance inspections.

• 42    Suspicious Transaction Reporting

A designated person who knows, suspects or has reasonable grounds to suspect that another person has been or is engaged in an offence of money laundering or terrorist financing shall report this to both the Financial Intelligence Unit (FIU) and the Revenue Commissioners.

Gambling service providers are further reminded that the procedure for reporting knowledge, suspicion or reasonable grounds for suspicion that another person has been or is engaged in an offence of money laundering or terrorist financing, on a confidential basis to the Financial Intelligence Unit (FIU) of An Garda Síochána and the Revenue Commissioners is as follows:

Financial Intelligence Unit (FIU) – through an online system called GoAML (https://fiu-ireland.ie/Home)

Revenue Commissioners – through Revenue’s Online Service (www.ros.ie)

• 49   Tipping Off

A designated person shall not make any disclosure that is likely to prejudice an investigation that is the subject of a suspicious transaction report.

• 54    AML/CTF Policies, Procedures and Controls 

A designated person shall adopt internal policies, controls and procedures in relation to their business to prevent and detect the commission of money laundering and terrorist financing. This document should be reviewed yearly and approved at an appropriate management level. This document should specify the policies, controls and procedures for dealing with the factors listed under section 54(3) of the Act. AML/CTF Policies, Procedures and Controls can also include a range of additional measures for the prevention and detection of money laundering.

• 54(6) Staff Training

A designated person shall ensure that all persons involved in the conduct of the business are instructed on the law relating to money laundering, that training records are maintained and that appropriate ongoing training is provided.

• 55    Record Keeping

A designated person shall ensure all records of the procedures applied, the information obtained, the history of services and transactions carried out in relation to each customer are retained on file and available for review.