Steve Hoare

The British Home Office has declared that there has been an increase in illegal casinos targeting the UK in its latest National Risk Assessment (NRA).

Citing this and other factors the Home Office has raised the anti-money laundering (AML) from low to medium, though the risk for terrorist financing remains low.

The risk level was maintained at low in the 2017 and 2020 Home Office’s NRAs, but the department has opted to raise it due to a number of changes it has observed over the past five years.

Changes in customer, geographical and transaction risks are the main reasons cited by the Home Office. The government is particularly concerned with the increase in funds moving through online casinos, new ways to play casino games and an updated assessment of casinos as Money Service Businesses (MSBs).

In this latter case, not all casinos function as MSBs and the Home Office has noted that the number of casinos offering services like foreign currency exchanges and cheque cashing services has declined, some still do.

MSB services heighten the money laundering risk faced by UK casinos, the Home Office asserts. The 2025 NRA stresses that MSB services attract higher risk customers using higher risk transactional methods, such as those making transitions to and from high risk jurisdictions.

White labels under spotlight
The connectivity between the UK casino sector and counterpart industries in more high risk financial jurisdictions has been causing a headache for British authorities, and those of other jurisdictions, for some time.

Even more alarming for the government is the alleged connections between some UK casino companies and illegal overseas operations. White label deals have been cited as being of particular concern here.

White label deals are commonplace in the UK, whereby companies pay a white label partner to operate their UK domain for them under said partners’ licence. The Home Office is concerned about some cases where operators have relied on unlicensed third parties for compliance.

“In these cases, the licensee would remain responsible for compliance, although they did not always have sufficient oversight,” the National Risk Assessment details.

“These arrangements are now less common, but risks remain where white-label providers offer large numbers of websites, as failure by a single remote casino to control the ML risks relating to their white-label partnerships can impact a significant number of websites.”

White label deals have been the subject of some negative press over the past couple of years. Much of this publicity has been around Isle of Man-based companies, with TGP Europe in particular getting a lot of attention.

Last year, the licence for TGP Europe-operated Kaiyun Sports expired, leading the UK Gambling Commission (UKGC) warning the company’s then football partners, Nottingham Forest and Crystal Palace, to reconsider the sponsorships.

TGP Europe would later shut down all of its brands in April 2025, surrender its operating licence and have to pay a substantial fine to the Commission, which accused the firm of failing to carry out sufficient due diligence against its partners, among other licensing breaches.

This came after years of mourning concerns at the Isle of Man government around the island’s targeting by international criminal groups. The Crown Dependency’s government shared concerns previously raised by the UN about the extensive activity of East Asian and Southeast Asian illegal gambling and cryptocurrency operations.

The UK Home Office risk assessment has not singled out any particular geographic region. However, the Home Office has noted that Suspicious Activity Reports (SARs) around illegal activity related to casinos have increased from 2020, rising from 6,000 in 2022/23 to 7,500 in 2023/24.

“Illegal casinos continue to attract new customers, heavily targeting online advertising with offers that entice new customers to gamble with them,” the NRA read.

“As they operate illegally, they will not be supervised by the Gambling Commission, nor have a requirement to implement MLR controls. The use of cryptoassets in illegal casinos is also increasing.”

Illegal casinos have been met with regulatory and enforcement action. The report notes that the UKGC issued 1,158 stage one cease and desist notices relating to online casinos, referred 118,181 URLs to Google and Bing and had 81,292 URLs promoting casinos from search engine results between April 2024 and March 2025, for example.

Further challenges are on the horizon though, particularly technological ones. The NRA highlights the use of AI as a key example, with deepfaked documentation commonly used to bypass compliance checks.

The Home Office has also cited the use of in-game currencies as presenting fraud and money laundering risks and crash games being offered by some licensed casinos as presenting a money laundering opportunity for criminals.

The timing of this report is apt, coming at the same time that the licensed betting industry both in the UK and in other European nations continues to make the case that a gambling black market is posing significant risks to regulated gambling sectors.

However, while the NRA has noted the increase in prevalence of illegal gaming, something licensed operators have been highlighting for years, it does also point out some flaws in the regulated industry that operators may want to address if they want their black market concerns to be taken seriously.

The UK Gambling Commission (UKGC) has published an ‘impact report’ on High Value Customers (HVCs) since introducing regulatory changes in 2020/2021.

The regulator has maintained concerns about the management and incentivisation of members of ‘VIP schemes’ or ‘High Value Customer’ schemes dating back to 2021.
Following a consultation process coordinated with the Betting and Gaming Council (BGC), the Commission imposed new rules on the management and remit of VIP/HVC schemes used by licensed operators.

Headline measures included an outright restriction on VIP schemes being promoted to customers aged under-25. Furthermore, all operators had to appoint a senior executive to monitor and audit HVC schemes directly with the UKGC.
Technical requirements saw the VIP schemes adopt new ‘enhanced due diligence’ on source of funding and affordability checks. Operators must ensure that all VIP accounts are audited with records kept of customer wagers and activities to prevent compulsive gambling.
New rules were effective from October 2020, as the Commission warned about previous instances of AML failings related to VIP scheme management.

Presenting its report, the Commission cites: “The initial impact on the reduction of HVC scheme members in 2021 was included in the Commission’s Advice to Government – Review of the Gambling Act 2005 document, including an estimated reduction of 90% in the number of customers signed up to schemes.

“This report presents a further consideration of the impact of the restrictions to VIP or High Value Customer (HVC) schemes.”

Since the implementation of these rules, updated data from 2024 confirms that the number of operators running HVC schemes remains stable, and membership levels have not rebounded to pre-2020 levels.

Crucially, the number of enforcement cases where HVC schemes were identified as a contributory factor has significantly declined, signalling a major success in mitigating the consumer protection and compliance risks that originally prompted regulatory intervention.

Commenting on the findings, David Taylor, the Commission’s Head of Evidence and Evaluation, said: “The headline findings are that these schemes are no more commonplace now than they were in 2021 – after the regulatory change.

“The number of consumers in them has also remained consistent, and the data collected from operators indicates every HVC scheme now has a senior executive appointed to oversee and be held accountable for how the scheme is operated.”

The report also examined the economic relevance of HVC schemes. On average, such schemes now account for just 3% of Gross Gambling Yield (GGY) across the sample.

However, the Commission notes that non-remote casinos show a growing dependence on HVC customers, with HVC-generated GGY often exceeding 10% in this sector.

Taylor explained: “One sector in this exercise which seems to have a greater reliance on scheme members as a proportion of GGY is land-based casinos, which is in line with our expectations.

“The vast majority of customers in high-end casinos are high-net-worth individuals based overseas. This factor, in particular, may have led to the difference in GGY proportions compared to other sectors and it’s worth noting that this finding isn’t accompanied with any allegations of consumer harm.”

Positive Overall Impact & Change
The Commission deems the overall impact of its 2020–21 HVC policy as positive — achieving its primary goals of lowering risk and enhancing accountability. Nonetheless, it acknowledges that revisions may be warranted in light of the unique characteristics and reliance of the land-based sector on HVC clientele.

Taylor added a note of caution to audiences: “Whilst we remain mindful that this exercise is reasonably modest in scope, the findings indicate that the intended impact is being achieved. Although evaluation exercises like this will never be able to give total assurance, it does provide an indication that the regulatory objectives have been delivered and further changes are not currently required.”

On transparency, the report notes limitations of its evaluations, most notably that the analysis is based on a sample of operators rather than a full industry census. This means some outliers or emerging practices may not have been captured. Similarly, while the Commission reviewed complaints made through its Contact Centre and third-party channels, it cautions that low complaint volumes do not necessarily reflect the full consumer experience, as they may be influenced by public awareness or reporting mechanisms.

Looking ahead, the Commission confirms that the management and oversight of VIP and HVC schemes will remain under close review. Compliance teams will continue to monitor the sector, and “may recommend a future review if findings change significantly,” particularly in response to trends within the land-based sector or shifts in consumer protection outcomes.

The All-Party Parliamentary Group (APPG) on Gambling Reform has announced the launch of a new inquiry into the “Future of Gambling Regulation in the UK,” with veteran Conservative MP Sir Iain Duncan Smith assuming the role of Chair.

The move marks a renewed push by the cross-party group of reformists to scrutinise the Government’s gambling policy and challenge what Duncan Smith and colleagues see as an incomplete and insufficient White Paper.

“Much more needs to be done to ensure our regulatory framework is fit for the digital age to protect people from harm,” he said in a statement urging stakeholders to contribute to the inquiry.” Duncan Smith noted

A longstanding critic of the gambling industry, Duncan Smith has repeatedly attacked the prominence of betting ads in football and the leniency of current licensing practices.

He has also taken aim at the UK Gambling Commission (UKGC), claiming the regulator is a “soft touch governor” that has allowed repeat offenders to continue operating with minimal consequences.”

The inquiry, backed by both Conservative and Labour MPs, will revisit key themes from the Gambling Act review, particularly those deemed undercooked or deferred in the White Paper. These include advertising rules, online protections, and new calls from local councils for more control at the community level.

Duncan Smith has further pressed the Government to reverse its decision to let Premier League clubs broker their own gambling sponsorship deals. He branded Prime Minister Rishi Sunak’s position a “soft decision” and renewed calls for legally binding advertising curbs in sport, instead of the current voluntary arrangements.

This APPG-led initiative builds on a track record that includes successfully campaigning for fixed-odds betting terminal (FOBT) reform, the introduction of a statutory levy for NHS addiction services, and the implementation of stake limits for online slots.

As reported by iGaming Expert, reform advocates have welcomed the inquiry’s revival. Will Prochaska, Director of The Coalition to End Gambling Ads, said: “This is a significant moment in the campaign to reform the British gambling industry. The coming together of a Tory grandee — Sir Iain Duncan Smith — with fresh and passionate backbench Labour voices such as Beccy Cooper and Alex Ballinger is going to be a powerful combination on the APPG.”

The Labour government has pledged to implement the recommendations of the Gambling Review but concedes that certain issues such as advertising, public health and local oversight may require a specific review to determine outcomes.