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 However, this specific violation is no longer active and does not require further action.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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The tribal gaming regulator has said that has flagged what it considers to be multiple offenses committed by the Apache Tribe of Oklahoma dating back to 2013 and that have to do with the annual audits of gaming operations and the Gaming Regulatory Act (IGRA).

The infringements flagged by the regulator, are serious and they criticize the lack of timely and compliant financial statements by the company. The two properties that are tied to the infringements are the Golden Eagle Casino and the Silver Buffalo Casino, a now-closed property.

Apache Tribe in Hot Water with NIGC

NIGC outlined specific breaches had to do with three areas, including the submission of annual audits, the hiring of an independent CPA to conduct independent audits of each casino for each fiscal year, and independent audit and financial statements sent to the regulator within 120 days of the end of a property’s fiscal year.

According to the regulator, which went back and looked all the way back to 2013, some of the audits had been carried out by an unlicensed CPA and were therefore unacceptable. The situation was further outlined by an official press release with a statement from NIGC chairman E. Sequoyah Simermeyer:

NIGC’s technical assistance provided to the Tribe over the past several years to correct these violations and to improve its internal controls and record keeping has not resulted in voluntary compliance. Submitting timely and accurate annual independent audit reports and AUPs is critical to NIGC’s mission to protect the integrity of Indian gaming, and we do not take this enforcement action lightly.

NIGC chairman E. Sequoyah Simermeyer

Massive Fines Are Possible But Not Very Likely

AUPs refer to agreed-upon procedures, or in this case, the obligations that tribal operators and their properties have towards the regulator. NIGC has noted that a normal course of action would be to issue a fine to a property of $57,527 per day for each day of missing reports and audits.

The tribe now has 15 days to respond to the regulator. The regulator logged the case on April 19, which is the date from when the grace period is counted. It’s unlikely however that NIGC will particularly seek to enforce a stiff penalty on the tribe’s properties, and rather seek a course to remedy the records.

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