Malta’s Financial Intelligence Analysis Unit (FIAU) has slapped a hefty fine of €222,736 ($244,085) on Trannel International Limited, a subsidiary of the Kindred Group, for significant lapses in compliance with regulatory standards. 

FIAU Exposes Trannel’s Risk Analysis Shortcomings with Critical Compliance Deficiencies

The FIAU’s investigation revealed that Trannel had failed to conduct proper risk analyses for a substantial number of clients whose deposits exceeded €2,000, as mandated by law. Critical deficiencies in Trannel’s CRA methodology were identified, with a lack of a system to connect multiple customer accounts, reported Television Malta’s TVM News. Each account was assessed independently, disregarding the broader context of a customer’s overall activity.

In a proactive response to the compliance examination, Trannel rectified the deficiency by implementing an automated risk assessment model tied to account registration. Despite these corrective actions, the FIAU emphasized the gravity of the lapses in Trannel’s compliance measures.

The regulatory body highlighted instances where Trannel’s risk assessment heavily favored transaction risk over other crucial pillars such as customer and geographical risk. Inappropriately rated profiles accounted for 40% of the reviewed player profiles, neglecting factors like deposit amounts, transaction speed, and payment methods.

High-Value Player Profiles Unveil Trannel’s Inadequate Scrutiny of Financial Red Flags

Two specific player profiles drew attention due to Trannel’s failure to scrutinize transactions adequately. In one case, a player deposited €3.5 million ($3.8 million) within 18 months, engaging in non-closed loop transactions with discrepancies in declared income. 

The second case involved deposits exceeding €350,000 ($383,548) in three months, questionable income sources, and third-party e-wallet transactions. Trannel neglected to gather essential information to substantiate these players’ financial activities.

Furthermore, Trannel fell short in fulfilling record-keeping obligations, with 70% of player profiles lacking necessary documentation from open-source intelligence obtained from the internet. 

Malta is not the only jurisdiction where Trannel has been experiencing challenges. In June, Norwegian gambling authorities received legal affirmation as the Borgarting Court of Appeal rejected Trannel International Limited’s appeal against a compulsory fine of NOK 1.2 million ($108,600) per day. 

The legal dispute began in 2019 when Norway’s gambling regulator, Lotteritilsynet, urged Trannel to cease operations in the country, leading to rejected appeals, a suspension, and subsequent fines, with the recent court decision signaling the end of Trannel’s legal battles in Norway. 

Culture and Equality Minister Anette Trettebergstuen noted that the court’s ruling aligns with the Norwegian exclusive rights model, while Atle Hamar, director of Lotteritilsynet, anticipates Trannel’s complete withdrawal from the Norwegian market.

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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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