The US Department of the Treasury has published its 2024 National Money Laundering Risk Assessment. The report highlighted, among other things the online gaming and sports betting sector’s vulnerability to money laundering.

According to the Treasury, the anonymity provided by the online gambling sector provides some unique money laundering risks. While US casinos have a number of AML laws to follow, as per the Bank Secrecy Act (BSA), not all operators are aware of their obligations, the department pointed out.

Considering the volume of betting, the fast growth of the online gambling market and the disparities between separate jurisdictions, enforcing the requirements is a challenging task, the US Treasury noted. As a result, the US online betting market is exposed to “significant and increasing money laundering risks.”

While the legal betting sector is very vulnerable to money laundering, illegal gambling operators represent additional dangers. Cryptocurrency-based casinos, for example, are no ubiquitous and add more nuance to the saturation.

The US Department of the Treasury noted that some fraudsters would deposit criminally acquired money into online sports betting accounts and then withdraw them to disguise them as winnings.

The Treasury has already recorded a number of such cases, including a recent fraud that saw a Georgia man launder a whopping $1 million through a betting account. The money had, in reality, come from faith-based charities and individual donors. The money, initially intended for religious purposes, was appropriated for personal gain.

The Department Wants to Raise Awareness of AML Risks

The Treasury’s report hopes that it would be able to raise awareness of the issue and educate organizations about the vulnerabilities of the US business sector. To that end, the department also emphasized other risk-heavy sectors, such as dealings with Russia and North Korea. The former is increasingly keen on acquiring US-origin military products, while the latter has been leveraging hackers to undermine and exploit the American digital economy.

Brian E. Nelson, the department’s under secretary for terrorism and financial intelligence, concluded that the Treasury remains committed to protecting the US economy from fraud.

Treasury, through our National Risk Assessments, is at the cutting edge of analyzing the global risk environment to protect the US and international financial systems from abuse by illicit actors.

Brian E. Nelson, under secretary for terrorism and financial intelligence, US Department of the Treasury

Nelson urged businesses within the public and private sectors to familiarize themselves with the Treasury’s full report and stay tuned for the forthcoming National Strategy for Combating Terrorist and Other Illicit Finance.

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The latest company to have been handed down a fine is Casino Cosmopol which admitted fault and agreed to pay SEK2 million, or $200,000, to the regulator. This penalty is awarded in relation to anti-money laundering (AML) breaches outlined in the watchdog’s conclusion of the case and the two-year investigation.

Cited Breaches Are a Matter of the Past

Spelinspektionen says that certain elements of Casino Cosmopol’s AML processes were insufficient, and the operator had “failed” customer knowledge.  The regulator specifically looked into AML practices, citing previous concerns about compliance with the Money Laundering Act.

Casino Cosmopol, although acquiescing to the latest enforcement action, said that the issues described by the regulator were now an issue of the past and not something that Casino Cosmopol had overlooked to rectify.

The regulator has reflected on the positive changes that the operator had enacted as a result of the intervention and said that it expects Casino Cosmopol to indeed comply with all regulatory criteria moving forward.

Among those are improved money laundering training for staff which should help ensure that team members are fully prepared to meet the highest regulatory standards in the country. Apart from training, the operator uses different tools that help detect and flag suspicious transactions, enabling the company to respond in a timely and firm manner.

Gambling Regulator Is Tough on Financial Crime

Spelinspektionen has been calling for stricter measures when it comes to financial crime in the gambling industry and recently applauded a proposal pitched by the government and designed to, among other things, address AML deficiencies. Interestingly, though, the regulator does not believe that a credit card ban is needed in the country right now.

The proposal, however, also wants to increase the tax collected from gambling businesses to 22% from the current 18%, which has ruffled industry feathers and issued a response from BOS, a trade group that protects the industry’s interests and liaises with the government on various matters, including player protection and regulatory course-correction.

The Swedish Gambling Authority has not spared any effort in going after companies that it thinks are also coloring around regulatory lines. Recently, the watchdog named Videoslots as one of the operators to have breached the country’s CFT and AML mandates and rules.

The amount of the penalty was considerably larger at the time, with the company handed down a $810,000 fine.

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Thanks to this expanded tie-up, Casumo, a leading casino, will benefit from Neccton’s well-established track record for enhancing responsible gambling and anti-money laundering capabilities in multiple regulated markets.

For context, Casumo and Neccton first teamed up in February 2022. The latter company did not become a part of the OpenBet portfolio until 2023.

Expanding the Partnership to Improve RG and AML

The partnership will cover the United Kingdom, Sweden, Spain, and Malta, as well as Gibraltar and Ontario, Canada. Neccton is designed to bring awareness to existing issues with a customer’s gameplay, by focusing on the player rather than rerouting the process through the operator.

The automated and powerful software serves as a pathfinder for the operator to follow and ensure that RG and AML standards are met in full, and importantly, that consumers benefit from a leading solution when it comes to controlling their gambling habits.

Casumo is one of the long-standing casinos in the industry and as such, it is fully committed to ensuring that its reputation for doing fairly by consumers and upholding robust industry standards is actually on point.

Commenting on this new opportunity, Neccton managing Director Michael Auer said that expanding the collaboration with Casumo was an important step forward for ensuring that player protection and safer gambling experiences are the core mission that the casino wants to fulfil as part of its business operations.

“Neccton’s all-in-one solution guarantees that Casumo gains access to industry-leading software, equipped with player profiling and comprehensive reporting capabilities. This integration will not only enhance the overall betting experience but also ensure its utmost security,” Dr Auer added.

Casumo chief customer expeirence officer Sandhya Singh was similarly welcoming of the opportunity to partner and boost the operator’s player-protection safeguards through Neccton. Singh called player protection an “integral part” of everything that Casumo does.

Staying Proactive in Helping Players Be Protected

Through deploying Neccton’s powerful real-time solutions, Casumo has the means to proactively monitor players and ensure that it builds a sustainable relationship with its player base while deploying advanced and reliable solutions across the board.

Casumo has been very particular about ensuring that it has the means to protect consumers and it partnered with mkodo for its geolocation software in Ontario, Canada, to ensure that the company maintains compliance with local regulations.

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Singapore’s Gambling Regulatory Authority (GRA) announced that it has penalized Resorts World Sentosa (RWS) over due diligence failures. According to the authority, the casino failed to perform the checks outlined in the Casino Control Act 2006 (CCA) and the Casino Control (Prevention of Money Laundering and Terrorism Financing) Regulations 2009 (PMLTF Regulations).

Back in 2020, the GRA asked RWS to review the activities of some of its customers. As a result, the operator recorded instances of non-compliance, prompting further investigation by the GRA. The regulator eventually discovered that between December 2016 and December 2019, RWS committed multiple due diligence failures.

The GRA learned that RWS’s employees did not perform checks for certain transactions of over 5,000 Singaporean dollars and did not establish the identity of the third-party depositors, thus violating the PMLTF Regulations.

As a result of its serious violations, the casino resort was handed an S$2.25 million fine (roughly $1.67 million in USD). The GRA has also canceled the special employee license of one of the employees involved in the breaches. The authority is still conducting investigations to determine the culpability of the other special employees involved in the violations.

RWS Will Try to Do Better

The GRA reported that RWS had a PMLTF framework and controls in place. Despite that, systematic failures in certain controls prevented the company from detecting some of the instances of non-compliance.

The authority pointed out that RWS took immediate action to address the non-compliances once they were detected. The regulator also noted that RWS engaged an independent party to review its standard operating procedures. In the meantime, the casino resort has undertaken a review of its corporate culture, aiming to reinforce its internal controls and corporate governance.

The GRA concluded that RWS’s violations are very serious. It reminded operators that it will not hesitate to take disciplinary action against errant casino companies and will continue to exercise “tight supervision” over their compliance matters.

This is in line with Singapore’s recent plans for reinforcing its regulations. In November, the country, which already has strict regulations on gambling, considered stringent cryptocurrency regulations.

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The Netherlands’ gambling regulator, Kansspelautoriteit (KSA), has slammed another operator with a hefty fine. The recipient of the fine is Betent, which operates in the country under the Betcity brand.

According to the announcement, Betent will have to pay EUR 3 million (roughly $3.27 million) for its violations of the Dutch regulations on Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF).

Betent Failed to Comply

Known as WWFT, the Netherlands’ AML and CTF law requires gambling licensees to monitor their customer’s activity and report suspicious transactions to the Dutch Financial Intelligence Unit (FIU). To that end, operators must employ robust know-your-customer (KYC) measures, check their clients’ risk profiles and make sure that their operations do not facilitate money laundering or the financing of terrorism.

As it turns out, Betent’s AML and CTF measures were lacking. While the KSA warned the operator to properly conduct these investigations back in September 2022, Betent failed to properly fulfill its obligations.

The KSA later investigated Betent’s business again, only to find out that the violations persisted. In many cases, the regulator reported, Betent either did not conduct investigations or started them too late. In addition, the company was lax in requesting sources of income from its customers. The KSA also pointed out that, in many cases, Betent did not report unusual transactions to the FIU.

Because of the seriousness of these violations, the KSA opted to hand Betent a significant fine of EUR 3 million.

Jansen: Licensees Were Warned

René Jansen, the chairman of the Kansspelautoriteit, commented on the matter, pointing out that in May 2022, the authority issued a broad warning to licensed gambling companies. Back then, the regulator asked all licensees to get their WWFT affairs in order and warned that incompliant companies risk fines.

We then indicated that if research shows that providers are underperforming in the field of the WWFT, sanctions will be imposed. We are now following up on this. We are now really out of the start-up phase of the market, and that also means that there are no more excuses for some things.

René Jansen, chairman, KSA

Speaking of Jansen, the KSA chair is set to depart from the authority next year. The regulator is already on the lookout for a suitable replacement.

In the meantime, the KSA just unveiled subsidies for six gambling harm prevention research programs.

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Videoslots, the famous international online casino brand, has received a fine worth 9 million Swedish Crowns over breaches of anti-money laundering (AML) laws and regulations regarding the financing of terrorism.

The sum of 9 million Swedish Crowns would roughly convert into around 800,000 U.S. dollars or 760,000 euros. Spelinspektionen, the Swedish gaming authority, conducted an investigation into the operations of Videoslots and found that the operator has not met customer knowledge requirements.

Along with the fine Videoslots also received a warning from Spelinspektionen but for now the online casino operator was allowed to keep its license and continue to operate on the Swedish market. The operator also holds licenses in Malta, Great Britain, Denmark, Italy, and Spain.

The investigation conducted by Spelinspektionen found that Videoslots had faulty anti-money laundering protocols in place when dealing with ten of its largest customers between 2019 and 2021. The ten customers were selected at random from those who made the largest number of deposits and also deposited the biggest total amounts.

Obvious Discrepancies Between Income and Deposits

Spelinspektionen went on to study the operator’s actions concerning the ten large customers and eventually found a failure to account for obvious discrepancies between their income and their gambling transactions.

For example, one of the respective customers deposited more than 5 million Swedish Crowns between 2019 and 2021 despite having registered an income of just 57,000 Swedish Crowns in 2018. The discrepancies did not prevent the respective player from depositing and withdrawing large sums of money at Videoslots even though the initial risk was observed.

The online casino operator defended itself by saying that the audited customers do not necessarily represent the level of compliance of the entire operation and also that the final purpose of the anti-money laundering protocols is to report suspicious activity to the authorities. To that defense Spelinspektionen responded that the operator has a duty to detect and deter suspicious activity itself before reporting it to the authorities.

Moreover, the Swedish gaming authority also noted that while Videoslots was formally cooperative it was not willing to actively facilitate the investigation. The decision published by Spelinspektionen concluded: “The Authority’s assessment is that Videoslots’ customer knowledge regarding all of the audited customers has been insufficient. Videoslots would therefore not have maintained the business relationship or performed individual transactions regarding these customers.”

Source: “Videoslots punished in Sweden over “serious” AML failures“. iGaming Business. November 2, 2023.

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Sweden’s gambling regulator, the Spelinspektionen, has issued a penalty fee to Videoslots. According to the authority, the gambling operator failed to properly measure risk and committed anti-money laundering (AML) and counter-terrorist financing (CTF) violations.

For reference, Videoslots is a licensed operator that offers gambling in Sweden through its videoslots.com website.

As noted by the Spelinspektionen, the authority began supervising the operator’s AML protocols back in 2021 as it wanted to confirm whether the company secured sufficient knowledge of its customers. However, the review uncovered failings, confirming the regulators’ suspicions that Videoslots doesn’t properly assess its customers’ risk profiles.

The violations committed by Videoslots are considered to be very serious, the Spelinspektionen noted. According to the regulator, Videoslots has now received a warning and a penalty fee of SEK 9 million (approximately $809,300) for its breaches, which may have facilitated money laundering and terrorism financing.

This is one of the bigger fines handed by the Spelinspektionen, which noted that the maximum possible fine, as outlined in the Money Laundering Act, is EUR 1 million (approximately $1.06 million).

Sweden Is Stepping Up Its Efforts to Combat Illegal Gambling

In other news, the Spelinspektionen just published a partial report on the ongoing review of how collaboration with the Finansinspektionen (Financial Supervisory Authority) can strengthen the efforts against illegal gambling. The two regulatory bodies are currently evaluating how their efforts can benefit Sweden’s online gambling market.

As a result, the Spelinspektionen and the Finansinspektionen are exploring synergies and opportunities for payment blocking. The two regulators are also exploring opportunities for data sharing that will enhance their efforts.

An earlier proposal suggested allocating more money to the two authorities, helping them in their respective tasks. The proposal sought to allocate SEK 10.8 million (around $970,000) to the Spelinspektionen’s 2024 budget and SEK 4.5 million ($400,000) to the Finansinspektionen in 2024.

Over a month ago, Sweden proposed changes to its Money Laundering Act. Back then, the Spelinspektionen expressed its approval for most of the proposed changes but highlighted a few things that could be better.  The Swedish Trade Association for Online Gambling (BOS) also addressed the changes and similarly agreed with most of them but outlined a number of things to keep in mind.

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Last month, an operation by the Singapore National Police against a group of foreign nationals, allegedly involved in money laundering and other criminal activities, including online gambling and scams, resulted in the arrest and charges against 10 individuals. At the time of the announcement, an estimated S$1 billion ($732.2 million) in assets were seized.

In a recent update on Wednesday, the Singapore National Police confirmed that the estimated value of the seized assets amid the ongoing investigation soared to a staggering S$2.4 billion ($1.7 billion). Moreover, a prohibition of disposal order was filed as well, meaning that the assets, which included gold bars, properties, luxury watches, cars and bags, could not be sold.

The initial operation included simultaneous raids in areas, including River Valley, Sentosa, Bukit Timah, Orchard Road and Tanglin. Ten individuals, arrested during the operations, are facing charges related to money laundering. The alleged participants in the illegal operation included foreign nationals with passports from China, Cambodia, Cyprus as well as Turkey. The investigations into the massive money laundering operation continue.

“In response to media queries, the Police provided an update on further operations conducted in relation to the group of foreign nationals suspected to be involved in laundering the proceeds of their overseas organized crime activities, including scams and online gambling. During these operations, additional assets were seized and issued with prohibition of disposal orders. To date, the total value of assets seized or issued with prohibition of disposal orders by the Police stands at more than S$2.4 billion,“

reads a statement released by the Singapore Police Force

Bank Accounts Frozen, Cash and Expensive Items Seized

According to the recent statement released by the Singapore Police Force, some S$1,127 million ($820.1 million) was seized from bank accounts. Additionally, the operation sized approximately S$76 million ($55.6 million) in cash that included foreign banknotes.

The massive anti-money laundering operation seized 294 luxury bags, as well as 164 luxury watches and a staggering 68 gold bars. During the raids, some 546 jewelry pieces were seized, along with 204 electronic devices including mobile phones and computers. Cryptocurrency, valued at more than S$38 million ($27.8 million) was seized as well.

Some 62 cars along with 110 properties, estimated to be worth more than S$1,242 million ($878.7 million) were impacted by the prohibition of disposal orders. The law enforcement even sized ornaments, as well as bottles of wine and liquor.

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Gambling operator Tipwin has been hit with a substantial fine in Denmark after a year-long investigation into alleged breaches of anti-money laundering (AML) regulations. The Danish Gambling Authority, known as Spillemyndigheden, imposed a DKK100,000 ($14,476) fine.

Danish Regulator Escalates Case Against Tipwin

The troubles for Tipwin began in June 2022 when Spillemyndigheden, the Danish Gambling Authority, reported the company to the police, alleging severe violations of the Danish Money Laundering Act. The investigation revealed that Tipwin had negligently breached two subsections of the Act. These regulations pertain to risk assessments, policies, and internal controls concerning AML.

Spillemyndigheden’s concerns centered around Tipwin’s risk assessments, policies, business processes, and controls for both land-based and online gambling offerings. Spillemyndigheden reported Tipwin to the police for failing to address money laundering risks and violating the Anti-Money Laundering Act after Tipwin neglected to conduct a required risk assessment, provide printed policies for its retail offerings, and establish necessary business procedures and controls related to money laundering by set deadlines. 

Spillemyndigheden considered these obligations fundamental and gave Tipwin three months to rectify these issues, which included staff training on money laundering policies. However, it’s worth noting that the requirement for training improvement was annulled on September 9, 2022, following certain corrective measures taken by Tipwin.

Denmark’s Spillemyndigheden Steps Up Fight Against Money Laundering in Gambling

In recent years, Spillemyndigheden has intensified its focus on combating money laundering in the gambling sector. Tipwin is not the only operator to face AML-related actions, as other companies like Casumo, Casino Copenhagen, bet365 and Betfair have also faced injunctions in the past year.

The crackdown on AML activities began in July 2022, aligning with the Ministry of Justice’s new strategy to address these concerns effectively.

Denmark’s gambling regulator Spillemyndigheden has been diligently working to enhance player protection and industry sustainability. The regulator has tightened controls on deposit limits and bonuses, targeted illegal gambling websites, and even sought collaboration with tech giants like Google and Facebook to combat illegal gambling. 

Just last week, Spillemyndigheden blocked 49 illegal gambling websites, bringing the total number of blocked sites in Denmark since 2012 to 276. The regulator will now increase the frequency of blocking illegal gambling websites, implementing these measures twice a year instead of once. 

While Spillemyndigheden’s efforts set a positive example for other regulators worldwide, the complex regulatory environment in Denmark presents challenges for operators, requiring thorough documentation and compliance with over 750 individual requirements. Third-party solutions like SG:certified have emerged to streamline the regulatory process and help operators navigate the intricate landscape.

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Betfair International Plc, a subsidiary of Flutter Entertainment, has been hit with three enforcement orders and a reprimand by the Danish Gambling Authority, Spillemyndigheden, for breaching Denmark’s Anti-Money Laundering (AML) Act.

Betfair Faces Regulatory Action for AML Act Violations in Three Key Areas

The regulatory authority found that Betfair had failed to meet the requirements set out in the AML Act in three key areas. The first order was issued because Betfair’s risk assessment did not adequately consider the inherent risk factors associated with its business model.

The second order was issued due to insufficient written procedures for customer due diligence. The procedures did not ensure that customer due diligence measures were conducted at appropriate times in accordance with the requirements outlined in the AML Act. 

Furthermore, the written procedures did not address how Betfair would become aware if an employee was convicted of a criminal offense during their employment, thereby increasing the risk of money laundering and terrorist financing.

The third order was given because Betfair failed to provide documented evidence of regular and appropriate controls in various areas such as risk management, customer due diligence, employee screening, investigation and reporting obligations, information storage, and internal controls.

The company must now submit an updated risk assessment that addresses the identified shortcomings, improve its written procedures, and provide documentation of future control procedures.

Betfair has been given a three-month deadline to rectify the issues highlighted in the first two orders, while a twelve-month deadline has been set for the submission of documentation demonstrating compliance with the third one.

Spillemyndigheden Issues Reprimand to Betfair over Customer Identity Control Deficiencies

Additionally, Betfair received a reprimand from Spillemyndigheden for its inadequate control of customer identity information up until May 16, 2023. However, this specific violation is no longer active and does not require further action.

The Danish Financial Supervisory Authority (DFSA) introduced updated rules for the AML Act earlier this year, imposing stricter requirements for customer due diligence and monitoring individual transactions and money transfers.

Betfair now faces the challenge of addressing the deficiencies highlighted by the Danish Gambling Authority within the specified timeframes, in order to ensure compliance with the AML Act and maintain its operations in Denmark.

Betfair has also faced difficulties in Sweden and the UK. In April, the company was fined for providing betting markets on 148 matches between 2021 and 2022 in the U21 Allsvenskan, a youth soccer league where operators are prohibited from offering gambling opportunities. In May, Betfair faced a fine of £490,000 ($606,300) from the UK regulator for the dissemination of promotional material to individuals who had self-excluded themselves.

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