The gambling sector continued to account for the vast majority of all money laundering reports to the Financial Intelligence Unit (FIU) of Guernsey in 2022, according to its latest annual report.
Every year the FIU outlines the number of ‘Suspicious Activity Reports’ (SARs), detailing the reasons for the reports, the vast majority of which are sent to relevant UK financial authorities.
Money laundering is usually the primary reason cited as to why a SAR has been filed. In 2022, 73% of reports were issued to the FIU due to concerns that money-laundering may be taking place.
The total number of SARs received by the FIU stood at 2,656 in 2022, down 26% on 3,600 reports received the year prior. However, as mentioned above, the bulk of these money laundering-inspired concerns originated from the gambling industry.
Of the 2,656 SARs, 76% – or 2,018 – came from the gambling sector. The industry was followed by trust and company service providers at 10% and banks at 8%.
This figure rose even further when SARs regarding just money laundering suspicions were considered, with 88% submissions made by betting and gaming operators and/or suppliers.
This is something that is ‘consistent with historical trends’, the FIU explained, citing that this has been a regular occurrence since 2018 when around 75% of money laundering SARs were received by the watchdog from betting firms.
Like other Crown Dependencies such as Jersey and the Isle of Man, and British Overseas Territories such as Gibraltar, there are several gambling firms registered in Guernsey, one of the most notable being Super Group, the parent company of Betway and Spin.
These reports were submitted by the gambling sector itself, the FIU noted. Adrian Hale, Head of the FIU, also observed in his statement that the industry is not considered ‘high risk’ by the Guernsey National Risk Assessment (NRA)
He said: “There is a significant e-gambling sector regulated in Alderney with a large international client base and the entire e-gambling sector has received a residual risk rating of ‘medium lower’ for money laundering in the NRA.”
Additionally, although still remaining the primary originating industry of most SARs, the number of reports from gambling dropped last year. Hale also detailed that around 89% of betting industry reports were submitted by one Guernsey licence holder, although not naming which company this was.
Hale continued: “The two key reasons for reporting suspicion both in 2021 and 2022 were identified as adverse open source information relating to their clients, followed by non-compliance with requests for client due diligence documentation or requests for further information.”