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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Operating within different gambling markets requires licenses, especially on the Old Continent. With one of the strictest gambling-related laws, Norway’s market is closely monitored by local authorities. Back in 2019, the country’s Lottery Authority, Lottstift, urged Trannel International Limited, a company owned by one of the biggest gambling operators in the world, Kindred Group, to discontinue its offering for customers in the country.

Trannel, the company behind the brands Unibet, Mariacasino, Storspiller and Bingo, disagreed with that decision and filed an appeal which was consequently rejected by the Ministry of Culture and Equality, as well as the Lottery Board in January 2020 and March 2020 respectively. Then, in February 2022, Lottstift issued a notice of a compulsory fine against Trannel while in June the same year, the Oslo District Court confirmed the legality of the Authority’s decision to implement a suspension against Trannel.

After that, the Lottery Authority imposed a compulsory fine of NOK 1.2 million ($108,600) per day against Trannel. At the time, the gambling watchdog said that the fine would be valid until the operator discontinues “the illegal gambling offer in Norway.” Not unexpectedly, Trannel filed a complaint against the fine which was rejected by the Ministry of Culture and Equality, as well as the Lottery Board. Now, the Borgarting Court of Appeal also rejected Trannel’s appeal, siding with the Lottery Authority in the country and effectively putting an end to years-long legal battles.

Lottstift Urges the Company to Exit Norway

The Borgarting Court of Appeal’s decision was announced only recently, and it confirms that Lottstift was right to ask the company to withdraw from the gambling market in Norway. Anette Trettebergstuen, the country’s Culture and Equality Minister, explained that the latest court decision acknowledges that “the Norwegian exclusive rights model is in accordance with European Economic Area (EEA) law.” She also spoke about the result of the lawsuit, explaining that it comes as no surprise.

“The result is not exactly surprising, as this lawsuit joins the series of several other lawsuits in the gambling field where the state has been fully supported each time.“

Anette Trettebergstuen, Culture and Equality Minister in Norway

The Lotteries and Foundations Authority’s director, Atle Hamar, also commented on the topic. He explained that the latest court decision confirms that the Authority was correct to impose a suspension against Trannel. Given the court’s decision, Lottstift anticipates seeing the company “withdraw completely from the Norwegian market,” said Hamar in conclusion.

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