UKGC Signals Tougher AML Expectations as Confidence in AI Tools Wavers

The UK Gambling Commission has issued a clear warning to operators embracing artificial intelligence for anti-money laundering (AML) compliance: innovation alone is not enough.

Speaking at the Gambling Anti-Money Laundering Group (GAMLG) Annual Conference on 10 June, the Commission's Director of Enforcement, John Pierce, acknowledged the growing use of AI-driven compliance tools across the sector but questioned whether many are achieving the outcomes operators expect.

As compliance workloads increase and technology becomes more deeply embedded in gambling operations, the regulator appears keen to ensure businesses do not mistake automation for effective oversight.

AI adoption faces growing scrutiny

According to Pierce, the Commission is not opposed to operators using AI or algorithmic solutions to strengthen their AML controls. However, he suggested that the results seen so far have raised concerns.

He told delegates:

"We aren’t ideologically against the use of new technology in your processes. But you need to be sure they are doing what is required, and the evidence we’ve seen so far is too often they simply aren’t delivering."

His message to operators considering AI-based compliance tools was equally direct:

"So if your business is considering this type of approach, make sure it’s delivering compliance before you launch it."

The comments reflect a broader regulatory trend emerging across multiple sectors, where authorities are increasingly focused on proving the effectiveness of AI systems rather than simply approving their adoption.

Accountability remains the key issue

For many in the industry, the Commission's remarks raise an important question: how can operators demonstrate that AI-powered AML systems are working as intended?

Michael Clohisy, sports attorney and adviser at Quintel Intelligence, believes the answer lies in governance, testing and accountability.

Speaking to European Gaming, he said:

"It appears that the messaging at the GAMLG annual conference signalled that the Gambling Commission isn’t opposed to AI or algorithmic AML (anti-money laundering) tools, but rather sounding alarm bells that the tech is falling short on compliance, transparency, and oversight."

Clohisy argued that operators need stronger validation processes to ensure their systems are identifying suspicious activity correctly.

He added:

"Algorithmic accountability including forensic and risk-assessment testing to make sure, for example, that an operator’s Money Laundering and Terrorist Financing (MLTF) detection protocols (e.g., mismatched bank statements or potential ‘mule’ accounts) are being met."

He also pointed to the risks associated with relying too heavily on external suppliers and white-label arrangements, stressing that regulatory responsibility ultimately remains with licence holders.

As he explained:

"PML holders therefore must implement regular, more robust internal audits to maintain adequate oversight and compliance."

Familiar compliance weaknesses remain

While artificial intelligence dominated much of the discussion, Pierce's speech covered a wider range of AML concerns that continue to appear in regulatory reviews.

Among the recurring issues highlighted were gaps between written risk assessments and the controls being applied in practice, inadequate staff training, weaknesses in third-party oversight, poor record-keeping and an over-reliance on financial thresholds when assessing customer risk.

The Commission has also continued to focus on personal management licence (PML) holders, making it clear that senior individuals are expected to maintain meaningful oversight of AML controls regardless of how much technology is involved.

Despite these concerns, Pierce acknowledged that standards across the industry have improved since he joined the Commission in February 2024, with recent enforcement cases generally showing less severe failings than those seen previously.

The Future

The Commission is expected to publish an updated money laundering and terrorist financing risk assessment in July, followed by a refreshed emerging risks bulletin later this year.

Preparations are also underway for the UK's Financial Action Task Force (FATF) assessment in 2027, a process that will place additional scrutiny on the country's AML framework.

Elsewhere, Pierce revealed that the regulator is exploring a potential route for cryptoassets to be used as a consumer payment method in gambling, following developments at the Financial Conduct Authority. However, he indicated that any such move remains some way off.

The illegal gambling market also remains a priority. Pierce highlighted recent enforcement activity, including hundreds of cease-and-desist notices, large-scale website disruption efforts and the removal of thousands of gambling-related URLs from search engines.

A shift from adoption to evidence

The broader message from the conference was not that operators should avoid AI. Instead, the Commission appears to be signalling that the next phase of compliance will be defined by evidence rather than enthusiasm.

As more gambling businesses invest in automated monitoring systems, regulators are increasingly asking a simple question: can these tools demonstrably reduce risk and improve compliance outcomes?

For operators, proving that may soon become just as important as deploying the technology itself.