The Danish Gambling Authority, known as Spillemyndigheden, has released a refreshed version of its anti-money laundering (AML) guidance. This update, formulated after extensive consultations with external stakeholders, aims to support gambling operators, their employees, and other relevant parties. It complements the Danish Financial Supervisory Authority’s Guidance on Preventive Measures against Money Laundering and Financing of Terrorism.

New Guidance Incorporates Extensive Revisions

The revised AML guidance includes several key changes, particularly in the areas of risk assessment, policies, procedures, controls, and customer due diligence. These changes reflect both linguistic refinements and substantive updates. To help users navigate the revisions, a version history is now part of the guidance document, detailing specific amendments made.

Additionally, Spillemyndigheden has introduced a new document specifically focused on AML inspections. This document consolidates information that was previously scattered within the AML guidance, offering a comprehensive overview of the inspection process, potential outcomes, and confidentiality issues.

Ongoing Updates and Reporting Requirements

Spillemyndigheden is committed to keeping its anti-money laundering guidance current, ensuring alignment with updates to the Anti-Money Laundering Act, national risk assessments, and best practices in the field.

In other related developments, the authority updated its reporting requirements at the end of last month. These new requirements are set to take effect in 2025, although an exact implementation date has yet to be finalized.

Earlier this year, Spillemyndigheden also issued several orders and reprimands to the gambling operator SkillOnNet for breaches of AML regulations. The company received three orders for AML violations and two additional reprimands related to whistleblowing and business procedures, following an inspection of its compliance materials.

Source: “Spillemyndigheden updates anti-money laundering guidance”. Gambling Insider. June 3, 2024.

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Resorts World is under federal scrutiny after revelations that three gamblers, currently under investigation for their involvement in illegal sports betting rings, lost nearly $24 million at the casino since its opening less than three years ago. The venue reportedly failed to detect this suspicious activity, which could result in substantial fines if proven true.

A Black Market Operation Allegedly Operated Undisturbed

The investigation, led by federal authorities from California, aims to determine the extent of the alleged money laundering activities and could result in a significant fine for Resorts World. A recent report by local news outlet The Nevada Current revealed that the Nevada Gaming Control Board has also launched a related inquiry into multiple casinos.

This suspected money laundering operation connects to the legal case against Ippei Mizuhara, a former interpreter for baseball star Shohei Ohtani, who reportedly stole $4.5 million and gambled them away with a black market betting ring. Illegal bookmakers are known to launder money by wiring illicit funds to casinos, later withdrawing most of these funds.

Matt Bowyer, who has admitted to taking bets from Mizuhara, made 32 trips to Resorts World, losing $7.9 million between 2022 and 2023. Some of Mizuhara’s weekly payments to Bowyer, up to $500,000 each, were reportedly deposited into another suspect’s gambling account at Resorts World to obfuscate the source of the funds.

Resorts World Faces Pressure over Sibella’s Actions

Damien LeForbes, another high-roller who reportedly lost $12.3 million over nearly four dozen trips to Resorts World, and Real Housewives of Orange County star Ryan Boyajian are the other two individuals suspected of aiding Bowyer. The three men have not faced charges, but the situation may change as the authorities collect more evidence of their alleged illegal activities.

The ongoing investigation follows the court case against ex-Resorts World executive Scott Sibella, who received a sentence for his earlier anti-money laundering (AML) violations. Sibella turned a blind eye to suspicious activities, not unlike Bowyer’s alleged gambling ring. By opting not to report such transactions, Sibella effectively violated the federal Bank Secrecy Act and was sentenced to up to five years in prison and a fine of up to $250,000.

As the investigation continues, Resorts World could face significant penalties if found complicit in the alleged money laundering operations, underscoring the complexities and risks of maintaining compliance in the high-stakes world of casino gambling. Recent revelations highlight how such black market schemes may be more common than expected, necessitating increased vigilance by casinos.

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Resorts World, a leading hotel and casino complex in Las Vegas, has come under fire from investigators who are looking into alleged money laundering activities by three heavy-spending gamblers. The Nevada Gaming Control Board is examining several gambling establishments including Resorts World in light of information that came to their attention about huge losses incurred at these facilities.

Trio’s $24M Loss Ignites Concerns of Criminal Activity at Resorts World

Those close to the matter who spoke on condition of anonymity said the trio currently being investigated by federal authorities for their involvement with illegal sports betting rings lost a combined $24 million over three years while gambling at Resorts World, reported the Nevada Current. This announcement has prompted fears about possible criminal behavior within said premises.

There have been no official charges made against the gamblers but if found guilty in any way connected with this investigation it could be disastrous for Resorts World as well. The seriousness attached to these allegations can be seen through the active participation of California-based FBI agents among others.

According to reports, Damien LeForbes is among those mentioned as having lost an enormous sum – $12.3 million during his many visits to Resorts World. In addition, it has also emerged that he gave them a worthless $2.5 million cheque which however did not result in legal actions being taken against him up to now.

Ryan Boyajian visited the casino 21 times and lost 3.7 million dollars during the visits. He is a reality TV star known for starring in “Real Housewives of Orange County”. 

Additionally, a California bookie by the name of Matt Bowyer went to Resorts World 32 times between 2022 and 2023 where he lost 7.9 million dollars.

Alleged Illegal Activities Connections Prompt Las Vegas Casino Probe

No formal charges have been made against any of the three gamblers notwithstanding their colossal financial downfalls. Nonetheless, their involvement with illegal gambling operations which include stealing money from well-known sports personalities’ accounts has led to more questions being asked about their honesty in their gambling activities.

In addition to Resorts World, several gaming facilities in Las Vegas are being investigated. The Nevada Gaming Control Board and federal authorities are both looking into potential cases of money laundering and other illegal activities at casinos in the area. Scott Sibella, a former president at Resorts World, is another example of someone who has gotten in trouble for supposedly helping with unlawful gambling while working for MGM Grand.

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The Alcohol and Gaming Commission of Ontario (AGCO) has imposed a CA$70,000 ($52,000) fine on MGE Niagara Entertainment Inc., the operator of Fallsview Casino Resort in Niagara Falls. This punishment aligns with AGCO’s increased scrutiny in recent months as the regulator strengthens its enforcement policy. Fallsview Casino announced it would appeal the fine, likely heralding a more in-depth review of the case.

A Patron Engaged in Highly Suspicious Activity

AGCO’s latest news release stated that the incident occurred in April 2023 when a patron visited the Salon Privé, a high-limit gaming area within Fallsview Casino Resort known for offering sophistication and discretion. The patron reportedly handed CA$80,000 ($60,000) in strapped CA$100 bills, carried in a reusable grocery bag, to a casino attendant.

Surveillance footage revealed that after the money was counted and confirmed, the patron left the table with casino chips without engaging in any gambling activity at that time. Notably, the AGCO stated that the identified patron was previously flagged as “high risk” by the casino. However, employees took no measures to inform officials or on-site police as per standard protocols.

The AGCO further highlighted that Fallsview Casino failed to take meaningful steps to verify the source of the patron’s funds, a requirement under the Registrar’s Standards for Gaming’s anti-money laundering rules. The lack of action constitutes a substantial violation of AML guidelines and safe gambling requirements, justifying the steep CA$70,000 fine.

The Casino Is Determined to Appeal These Accusations

In response to the fine, a spokesperson for Fallsview Casino expressed disagreement, asserting the venue’s commitment to compliance and ethical conduct. Registered operators can contest such decisions and bring their case before the Licence Appeal Tribunal (LAT), an adjudicative tribunal independent of the AGCO and part of Tribunals Ontario.

“Fallsview Casino Resort is a company devoted to compliance and good citizenship. We will be appealing the decision and look forward to presenting our case.”

Fallsview Casino statement

This newest fine reflects AGCO’s continued vigilance and determination to ensure a safe and sustainable gambling sector. The authority has been very proactive recently, pursuing even high-profile operators such as PointsBet for responsible gaming breaches. AGCO noted it maintained close communication with operators, ensuring they adhered to its rigorous standards.

The CA$70,000 fine, CA$10,000 less than the alleged laundered amount, signals the regulatory authority’s uncompromising stance on adherence to anti-money laundering regulations within the province’s gambling establishments. Fallsview Casino’s decision to appeal should hopefully shed more light on the case, revealing whether the establishment failed its AML responsibilities.

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Money laundering is a criminal activity that involves individuals depositing funds, usually gained from illegal activities, through different businesses and then withdrawing them. Such crimes can often be complex and difficult to solve but not impossible. A recently released report suggests that one person, believed to be involved in drug trafficking, laundered proceeds through casinos across Winnipeg, Canada.

As announced by CTV News, a year-long investigation into the criminal activity resulted in the arrest of a person who was allegedly involved in the trafficking of illegal drugs, including cocaine and fentanyl. A 30-year-old man from Winnipeg with the initials M.R.H. was arrested on September 19, 2023, and charged for his alleged involvement in drug trafficking and money laundering.

Once he was arrested, the Manitoba Royal Canadian Mounted Police (RCMP) executed a search warrant on his home. Reportedly, police found a large number of drugs, including 882 fentanyl tablets, 498 grams of crack cocaine, 26 gabapentin pills as well as 241 Percocet tablets. Additionally, law enforcement uncovered 348 tablets with unknown substances along with cash.

Ill-Gained Funds Were Laundered through Casinos

The arrest comes after a long operation by the Manitoba RCMP. Last year, law enforcement was contacted by the gambling regulator in the province, Manitoba Liquor and Lotteries, which flagged suspicious activities recorded across casinos in Winnipeg. This prompted the Mounties to launch a large-scale investigation against the illicit activity that involved drug trafficking and money laundering. The operation was called Project Doom.

The investigation uncovered that drugs were distributed to remote First Nation communities, including St. Theresa Point, Island Lake, Garden Hill and Red Sucker Lake, among others. Additionally, drug trafficking occurred in neighboring North Spirit Lake in Ontario.

According to the investigation, the suspect who was arrested was allegedly involved in drug trafficking. Through the illicit activity, the individual was able to accumulate large sums of cash which were then laundered through casinos by cashing in and out gambling chips. The Mounties did not confirm the total sum involved in the criminal activity, but it is believed that it was substantial.

After the suspect was arrested, he was released on CA$50,000 bail ($36,500) with special conditions, including a prohibition from visiting gambling venues. It’s important to note that the charges against M.R.H. are yet to be proven in court, which means that he remains innocent until proven guilty beyond a reasonable doubt.

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Sweden’s gambling regulator, the Spelinspektionen, has responded positively to recently proposed changes to the Money Laundering Act that would adjust penalty fees for AML violations. However, the authority proposed a different approach for fines that are less serious and unsystematic.

Under the proposed adjustments, the Spelinspektionen must adjust penalty fines for operators that violate the country’s anti-money laundering rules. Starting April 1, 2024, the Spelinspektionen must specify a maximum fine size for violations of the AML laws, in line with the rules outlined in the Gambling Act.

Under these rules, the Spelinspektionen can revoke the license of a regulator that has committed serious, repeated or systematic violations. In the meantime, the Spelinspektionen is limited to issuing a correction order for violations that are not serious, repeated or systematic.

The Spelinspektionen is fairly positive about the changes but noted that the issuing of a correction order might not be an appropriate intervention for certain offenses. As a result, the authority may lack the relevant opportunity to intervene in certain cases.

The Spelinspektionen also noted that since violations of the Money Laundering Act have several alternative ways to calculate the maximum possible penalty, they should be regulated in a separate provision.

In the meantime, the Spelinspektionen welcomed the introduction of a written requirement for telephone sales of gaming services as this would help to protect consumers from harm.

In other news, the Swedish government recently proposed the allocation of more money to the Spelinspektionen and Finansinspektionen. Seeking to encourage a collaborative effort between the two regulators in the war on unlicensed gambling, the government allocated more budget to both entities.

Under the proposal, the Spelinspektionen would receive SEK 10.8 million (around $970,000) in 2024, SEK 15.6 million ($1.4 million) in 2025 and SEK 18.5 million ($1.66 million) in 2026. The Finansinspektionen, on the other hand, would receive SEK 4.5 million ($400,000) in 2024.

Earlier this month, the regulator also published information about the Swedish gambling market’s performance in the second quarter of the year, reporting that the authority’s licensees collectively recorded a turnover of SEK 6.7 billion (around $602,000) during the period.

Last month, the Swedish National Audit Office decided to probe into the Spelinspektionen’s work, evaluating the regulator’s actions, strategies, and overall effectiveness.

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The Swedish Trade Association for Online Gambling (BOS) has addressed the recently proposed changes to the Money Laundering Act. Put forward by the Ministry of Finance, the memorandum with proposals seeks to increase the penalty fee for certain violations.

The BOS, which represents around 20 licensed gambling companies in Sweden, expressed its delight to have been invited to comment on the matter. The body said that it sees the logic in increasing fines for AML violations to be similar to the fees for violations of the Gambling Act.

Gustaf Hoffstedt, BOS’ secretary general, confirmed that AML violations are among the most serious violations, which is why there is no reason to downgrade them. It concluded that would approve the Ministry’s proposal if the following points are taken into mind and included as necessary additions:

First of all, the BOS said that the Spelinspektionen’s sanction decision must be of high quality. Hoffstedt noted that courts could potentially cause trouble if they opt to change the authority’s decision to a large extent. He proposed initiating supervisory cases as a possible solution.

Secondly, Hoffstedt suggested that the level of sanction fees should be on par with the gambling industry’s “relatively marginal impact” on the financial system’s stability and credibility compared to financial actors.

Thirdly, the BOS proposed to base fines for AML breaches on the gross gaming revenue of gambling companies. Hoffstedt acknowledged that this is already outlined in the Ministry of Finance’s memorandum, which he praised on behalf of the gambling industry.

Hoffstedt: Fines Should Be Based on GGR

Hoffstedt commented on the difference between charging companies based on their total turnover and charging companies based on their GGR:

Typically, the gambling surplus makes up 5-10 percent of the total turnover, while profits to gambling consumers thus account for 90-95 percent. It falls on its own unreasonableness that penalty fees to be paid by the gambling company are based on money that does not belong to the gambling company, but that belongs to the gambling consumers.

Gustaf Hoffstedt, secretary general, BOS

The secretary general concluded that previously, the sanctions system had “lacked any form of proportionality.” However, the changes will set fairer standards that will nevertheless send clear signals to companies that violate the rules.

Speaking of turnover, the Spelinspektionen just published information about the performance of licensed operators in Q2 2023. The authority noted that turnover remains more or less stable, recording only a small decrease.

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Adelaide’s casino operator, SkyCity, has taken a decisive step by appointing a forensic investigations firm to conduct a comprehensive review of the company’s adherence to anti-money laundering regulations.

The move comes as part of the casino’s commitment to ensuring strict compliance with anti-money laundering and counter-terrorism financing laws.

Kroll Australia has been approved as the ‘independent monitor’ for this crucial task by South Australia’s liquor and gambling commissioner. This decision follows a directive issued by the commissioner back in May.

Kroll is a globally recognised provider of governance, risk, and compliance services, operating in more than 30 countries. It is noteworthy that Kroll is also currently overseeing the operations of Crown’s Sydney casino, a responsibility that has gained heightened attention given the increased scrutiny of Australia’s casino industry.

While an independent investigation into SkyCity Adelaide’s operations by the commissioner is currently in limbo due to pending Federal Court proceedings involving financial crime watchdog AUSTRAC and the casino operator, this move underlines SkyCity’s proactive approach towards ensuring regulatory compliance.

Commissioner Dini Soulio expressed confidence in Kroll Australia’s capabilities, both domestically and internationally, in similar matters.

“I approved the appointment of Kroll, after being satisfied that they would be sufficiently independent and have the expertise to effectively monitor SkyCity Adelaide to ensure they are meeting these very important requirements,” he said, further emphasising that Kroll’s team comprises individuals with experience at the national regulator, AUSTRAC, in addition to their expertise in fraud and risk management. This diverse experience positions them well to ensure that casinos fulfil their regulatory obligations.

As the sole casino operator in South Australia, SkyCity Adelaide bears a significant responsibility to uphold anti-money laundering and counter-terrorism funding measures, as well as policies to mitigate gambling-related harm, in alignment with regulatory mandates. Commissioner Soulio pointed out that SkyCity Adelaide’s role extends to serving the broader South Australian community and ensuring these regulatory requirements are met.

Kroll Australia’s role will involve a meticulous review and monitoring of SkyCity Adelaide’s enhanced anti-money laundering and counter-terrorism financing programs. Their findings will be reported back to the commissioner, contributing to a transparent evaluation of the casino’s compliance efforts.

SkyCity responded to this development by affirming their commitment to maintaining a proactive and cooperative stance in collaboration with both the commissioner and Kroll Australia.

In terms of financial performance, SkyCity reported a substantial 44.9% surge in full-year revenue to NZ$926.2 million ($854.9 million) recently. This growth was attributed to a resilient rebound and recovery in trading. However, the net profit of NZ$8 million ($7.4 million) was impacted by a NZ$49 million ($45 million) provision earmarked for potential penalties arising from legal proceedings with AUSTRAC, along with a NZ$49.7 million ($45.6 million) impairment of its Adelaide casino license.

Despite these challenges, SkyCity’s normalized EBITDA reached NZ$310.3 million, at the higher end of its previously adjusted guidance range. The adjustment was made in May due to the industry-wide focus on money laundering, resulting in increased legal and compliance costs.

On the stock market, SkyCity shares experienced a 1.4% decline, trading at $2.09 on Friday.

More gambling news

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The small Mediterranean island nation has long profited from its status as one of the world’s leading iGaming hubs but faces constant struggles with crime and corruption. In 2021, Malta was put on FATF’s greylist for systemic regulatory and enforcement failings, but a series of reforms managed to sway the financial watchdog. However, recent news indicates that the country’s woes are far from over.

Illegal Gambling Rings Launder Millions Each Year

A recent investigation connected to the 2017 murder of journalist Daphne Caruana Galizia uncovered an underground lottery ring that ostensibly accounted for an astonishing 30% of the total market share. The government managed to obtain the information thanks to the arrest of local criminal leader Melvin Theuma who shared extensive details about his organization in exchange for a presidential pardon.

Theuma’s input was instrumental in untangling the details behind the illegal lotto operation and its ties to the island’s construction and property markets. These businesses still operate primarily with cash, making them the perfect avenues to launder yearly lottery profits of up to €30 million. Despite the authorities’ efforts, the underground network allegedly maintains its presence across the island.

According to a detailed report by local news outlet MaltaToday, the parallel lotto operates parallel to the official national operator, using the same winning numbers. The underground organization offers tickets and substantial prizes, undercutting the legitimate lottery and using the accumulating gambling debts to undermine local communities.

Such Scandals Threaten Further International Sanctions

The rising controversy again draws attention to the Maltese authorities’ ability to enforce the law and crack down on organized crime. Despite Theuma’s cooperation, the underground lottery is ostensibly still alive and well. Perhaps the matter is not a priority compared to the country’s more pressing problems, but such public failings threaten to undermine what little goodwill the government has left.

2021’s FATF listing created a bureaucratic nightmare for companies dealing with financial services, banking, or gaming. The increased regulatory pressure disproportionately impacted smaller businesses and could have severely impacted the local economy if the government had not acted with alacrity. While updated laws and regulations are promising, the thriving underground lottery proves that enforcement is still sorely lacking.

Despite removing Malta from the greylist, the FATF maintains a watchful eye on the island nation. A return to past behaviors, lack of progress, or new regulatory failings can lead the country back into international trouble. The authorities and the public must work toward improvement across all levels of society to restore Malta’s damaged reputation and capitalize on its unique advantages.

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