Speaking at the Gambling Anti-Money Laundering Group (GAMLG) Conference in London, Gambling Commission director of enforcement and intelligence John Pierce warned that AI-driven compliance systems are too frequently falling short of anti-money laundering (AML) requirements.
A few weeks ago, the regulator United Kingdom’s Gambling Commission (UKGC) backed the Advertising Standards Authority’s decision to deploy AI to identify gambling advertisements likely to have a “strong appeal” to under-18s. Pierce stressed that the regulator is not opposed to the use of AI and other emerging technologies for AML purposes. However, he urged operators to ensure these tools deliver effective compliance outcomes before being implemented.
While this endorsement reflected the regulator’s confidence in AI for specific applications, Pierce cautioned against viewing the technology as a universal solution to regulatory challenges. He noted that evidence collected by the UKGC indicated that some AI systems were regularly failing to achieve the required compliance outcomes. As a result, Pierce said businesses adopting AI or algorithm-based compliance tools must be able to demonstrate that these systems are delivering the regulatory outcomes expected of them.
These Concerns Are Part of a Wider AML Focus
The warning on AI formed part of a wider critique of ongoing compliance shortcomings. Pierce highlighted a recurring gap between operators’ documented risk assessments and policies and the controls and procedures implemented in practice. He also noted that the Commission has adopted a tougher stance towards personal management license (PML) holders who fail to maintain adequate oversight of anti-money laundering controls.
Pierce also criticized operators for placing excessive reliance on financial thresholds to trigger customer reviews. He warned that companies could face regulatory action if they fail to carry out appropriate risk assessments before customers reach predetermined spending limits.
The UKGC director of enforcement and intelligence also said that some operators do not take a risk-based approach to their internal money laundering and terrorist financing assessments. He also claimed that some staff haven’t been trained well enough. He pointed out cases where bank statements or payslips showed red flags, but were not identified or escalated.
Despite these concerns, Pierce said overall compliance standards across the industry have improved since he joined the Commission in February 2024. He notes that the shortcomings identified in recent casework are generally less severe than those seen previously. Pierce also revealed that the Commission plans to publish an updated money laundering and terrorist financing risk assessment in July, followed by a revised emerging risks bulletin later in the autumn.
In other recent news about the UKGC, the watchdog is set to tighten its control over illegal lotteries in the UK.