The UK gambling regulator said it was aware of an increase in the scale and sophistication of attempts to bypass customer due diligence checks using AI-generated documents, deepfake videos and face swaps.

According to a recent National Crime Agency report, accounts created using AI are more likely to be used for criminality including money laundering and terrorist financing.

The Commission said operators will need to ensure their staff are appropriately trained to assess whether customer documents are false and generated via AI.  

A blog post by gaming lawyers at Wiggin LLP said: “It is critical that all operators reflect on this information and can demonstrate this to the Commission. This requires a detailed, recorded assessment of the risks presented, the relevance to their business, the mitigations identified and a clear mapping across into policies and procedures.

“We have seen operators criticised by the Commission for failing to record why a particular emerging risk was not actually relevant to them.”

Crash games, AI highlighted as risk vectors

Crash games were also highlighted by the regulator a potential risk.

While these games are not licensed in the UK, the Commission said they are often present on offshore crypto casinos and there has been increased interest in the vertical in recent months.

The regulator warned: “There are concerns that products of this nature can allow criminals to camouflage the high-risk behaviour of cashing out quickly with limited gameplay within the context of the crash game (where these behaviours are inherently more common), and that transactional monitoring controls may not be effective in detecting suspicious activity.”

Another emerging money laundering risk identified by the UKGC includes the rise of money service business activity at land-based and online casinos.

This is a type of service that can represent an AML risk when a casino allows customers to deposit large denomination notes of foreign currencies.

While the regulator said the number of casinos offering this has declined, it noted the activity is still occurring and, as such, rated it high-risk in its assessment.