Report Reveals How Crypto Casinos Exploit Loopholes to Reach UK Players

While the UK Gambling Commission (UKGC) is widely considered one of the most rigorous gaming regulators in the world, crypto casinos are successfully navigating regulatory blind spots to facilitate cross-border money laundering, according to iGaming intelligence platform Betconix.

Currently, no crypto-only casino has been approved for a UKGC licence. The licensing framework demands strict adherence to Know-Your-Customer (KYC) procedures, Anti-Money Laundering (AML) rules, and Customer Due Diligence (CDD) checks, along with full operational transparency.

However, offshore platforms skirt these requirements by simply basing their operations outside the UK. Through aggressive digital marketing, these operators can still attract British players. This often happens without those players realising they are using an unregulated service.

Betconix researchers found that some of these casinos rely heavily on indirect payment methods. E-wallets such as Neteller and Skrill, for example, allow customers to deposit funds that originated in cryptocurrency, effectively converting them into fiat currency before they reach the casino account. This way, they bypass the UKGC’s direct ban on crypto deposits while leaving regulatory bodies with limited visibility over the source of funds.

Perfect Recipe for Criminal Exploitation

The inherent features of cryptocurrencies make them a dream tool for criminals. Funds can move across borders in minutes, with no central bank or traditional clearing process to flag unusual activity. Offshore crypto casinos amplify this risk by combining the opacity of digital wallets with the absence of local oversight.

Betconix warns that this creates a “perfect storm” where the operators launder illicit cash through layers of unregulated accounts, wash it via anonymous wallets, and reintroduce it into the economy under the guise of gambling winnings.

In response, the UKGC is now tightening its net with new initiatives aimed at countering trends such as AI-assisted fraud and enhancing transaction tracing through blockchain analytics. Over the past year, several big-name operators have received substantial penalties for failing to meet AML and CDD obligations.

What Compliance Now Looks Like

For operators who wish to remain in the UK market without facing fines or losing their license, the compliance burden is heavier than ever. Experts recommend:

• Risk-profiling third-party payment providers to understand how their services handle cryptocurrency-originated funds.
• Implementing closed-loop payment systems to ensure deposits and withdrawals move through the same verified account.
• Conducting continuous monitoring and player reviews to identify unusual betting or withdrawal patterns.
• Reporting suspicious transactions promptly to the UK’s Financial Intelligence Unit (FIU).
• Proactively identifying vulnerable players and implementing responsible gambling measures early.