The Gambling Commission has placed the UK gambling software sector at a ‘medium risk’ of money laundering and terrorist financing, increasing the threat level from its previous guidance.

This is a direct result of the Commission’s efforts over the last few years to address an ever-growing black market.

Illegal gambling operators were seen as a rising threat to UK consumers in the government’s 2025 National Risk Assessment of Money Laundering and Terrorist Financing. This was the first time since 2017 that the money laundering risk in the casino sector was increased from low to medium.

The issue of business-to-business relationships and the risk of licensed companies supplying illegal website operators was raised in-depth by the Commission at the start of last year, when the regulator formally addressed reports of games by supplier licensees appearing on illegal gambling operators.

The B2B supplier theater of the war against the black market took a big step last month when the Commission’s regulatory investigation into licensed game supplier Evolution over its games being seen on UK-facing illegal websites came to a head.

Evolution subsequently defended its stance, saying:  “We do not control which markets our operator customers operate in. The decision about which markets to target with their services lies with the operators.”

However, the regulator’s investigation into the firm found “serious” AML deficiencies in how it conducted business with third-party companies, eventually leading to a £4.75m settlement with the Commission.

The fiasco led to the gambling authority seeking stronger supplier oversight, which is now reflected in its latest game software risk assessment.

It is taken into account that supplying games to unlicensed operators can occur unbeknown to the licensed supplier itself, as seen in previous cases reported by the Commission where suppliers lacked sufficient due diligence or record keeping has been less than satisfactory.

Therefore, suppliers are instructed to review their internal controls on a regular basis to ensure that they are in line with the Commission’s guidelines.

The regulator itself is providing additional support to ringfence the UK market against illegal operators, creating a brand new Head of Illegal Markets role and absorbing an additional £26m in government funding to disrupt the black market.