The Danish Gambling Authority (DGA) has issued three orders and a reprimand to Betfair for breaching various sections of the country’s AML Act.
The Flutter Entertainment-owned betting exchange is said to have breached three separate sections of Danish AML rules.
Breaches in detail
First, the DGA said, the operator’s own risk assessment did not separately assess the inherent risks connected to its business model, therefore breaching section 7(1) of the AML Act on risk assessment.
A second order was issued for breaches of section 8(1) of the Act on business procedures, for three separate reasons.
The operator’s written procedures for customer due diligence, the screening of employees and internal controls were all found to have insufficiencies.
For example, the regulator found that Betfair’s procedures on employee screening did not consider how the operator ensures it is made aware if an employee is convicted of a criminal offence which increases the risk of money laundering or terrorism during their employment.
Further, the firm’s written procedures on internal control measures, including precisely how and how often internal controls are conducted, were considered to be insufficient.
Finally, the DGA issued a third order for a further breach of section 8(1) of the AML Act on business controls.
The third order was issued because the operator does not have evidence that it has carried out controls in several areas with sufficient frequency.
Those areas include risk management, customer due diligence measures, the obligations to investigate, register and notify, record-keeping, employee screening and other internal controls.
Obligation to act
The orders issued by the regulator carry with them an obligation for Betfair to act.
The brand must now submit an updated risk assessment, updated business procedures addressing the shortcomings identified, and documentation for controls to be carried out in the future.
The regulator has issued a deadline of three months to correct the issues related to the first two orders, and a 12-month deadline to submit documentation for compliance with the third order.
The DGA also issued Betfair with a reprimand because previous business procedures up until 16 May 2023 did not sufficiently cover control of customers’ identity information.
That reprimand carries no obligation to act, because the breach has since been resolved.
“The Danish Gambling Authority notes that the rules on risk assessment, business procedures and controls are fundamental parts of the Anti-Money Laundering Act,” the regulator said.
“As a rule, breaches of the rules lead to an order or a reprimand or in serious or repeated cases, they are reported to the police,” it concluded.
Betfair in other markets
The reprimand follows on from other recent regulatory action taken against Betfair.
In April, the Swedish Gambling Authority issued the brand with a SEK4m fine after it offered betting markets on under-21s football, in contravention of Swedish regulations.
The brand was subsequently ordered to pay a further SEK4.5m for accepting bets on an under-19s football game in 2019.
In May, parent company Flutter was issued with a £490,000 fine by the UK Gambling Commission for marketing to self-excluded customers.
That failing originally occurred in November 2021.
As Gibraltar remains on the grey list of the Financial Action Task Force (FATF), the government faces mounting criticism.
But gambling commissioner Andrew Lyman has underscored that only one substantive action point remains pending, which does not relate to the local gaming sector.
The FATF stated that although progress had been made, the deadline for implementing the required actions has passed.
Gibraltar was placed on the grey list in June 2022 due to to deficiencies in anti-money laundering (AML) compliance.
The FATF had initially highlighted certain steps that Gibraltar needed to take to be removed from the list, including focusing on gatekeepers to the financial system and imposing appropriate financial penalties.
In response, Gibraltar implemented an action plan to effectively combat money laundering.
While the FATF acknowledged progress in strengthening Gibraltar’s AML and counter-terrorism financing regime, it urged the Rock to also demonstrate its ability to pursue more “final confiscation judgments commensurate with the risk and context of Gibraltar”, which is the only outstanding point.
Light at the end of tunnel
In comments made to iGaming NEXT, Gibraltar gambling commissioner Lyman stressed that all action points related to Gibraltar’s supervisory agencies were completed as of February 2023.
Gibraltar increased the number of gambling licensees by 13 last year, which Lyman said demonstrates the lack of grey listing impact on the jurisdiction’s gambling industry.
“Therefore, the grey listing has had only a limited detrimental effect on the sector, which can now see light at the end of the tunnel,” Lyman said.
Being on the FATF grey list typically results in increased regulatory scrutiny, limited access to banking services, and oversight by regulatory bodies due to financial institutions’ hesitancy to engage in transactions with countries on the list.
The Gibraltar government expressed its commitment to the ongoing process, with all relevant authorities working with the FATF to ensure full compliance with the action plan as soon as possible.
Scoring political points
However, Roy Clinton, shadow minister for financial services and gaming of the Gibraltar Social Democrats (GSD), expressed frustration and criticised the government for a lack of details on how delisting would be achieved.
Speaking to the Gibraltar Chronicle, Clinton highlighted the failure to deliver on previous statements regarding compliance within the given timescale and expressed concern about Gibraltar’s reputation as a high-risk jurisdiction.
Clinton noted that the Cayman Islands, which was also added to the grey list in 2021 and had a similar point to address, has already met the FATF action plan and will commence the process for delisting in October 2023 after an onsite visit.
The government responded to Clinton’s criticism by stating that the GSD was well aware of the strict rules of confidentiality governing the FATF process.
It expressed disappointment that the party had chosen to prioritise “scoring cheap political points” over the importance of the matter at hand.
Lastly, the government emphasised that, at present, there was nothing more it could do as the law enforcement agencies and regulators continue their work.
The Gambling Commission has ordered TGP Europe to pay a £316,250 penalty for anti-money laundering (AML) and social responsibility failures.
The white-label specialist – which powers 19 UK gambling websites including Stake.com and Sportsbet.io – will also receive an official warning and have conditions added to its licence.
The vast majority of TGP Europe’s white-label clients are Asia-based sports betting operators, including Newcastle United sponsor Fun88 and Leeds United sponsor SBOTOP.
The UKGC uncovered multiple failings between April 2020 and August 2022. It made the decision to impose licence conditions, a financial penalty and a warning on 22 February 2023.
An investigation found that customers were allowed to continue to gamble after hitting multiple safer gambling alerts without intervention.
The operator was also adjudged to have relied on automated interactions when those limits were triggered, instead of human interaction.
TGP also failed to properly assess the effectiveness of these interactions, according the UKGC.
Additionally, Several of the operator’s AML procedures were deemed inadequate by the regulator, including its money laundering and terrorist financing risk assessment.
TGP failed to adequately consider or mitigate the money laundering risks posed by its B2B relationships in the eyes of the Commission, which is especially important for a white-label provider using the brand rights of another business.
As a result, additional conditions have been added to TGP’s licence to ensure that thorough due diligence checks are conducted by the company in future.
The Gambling Commission said it has reminded all operators entering white-label partnerships of their obligations.
Last month, the UKGC imposed its biggest regulatory settlement ever of £19.2m on William Hill, the British bookmaker now owned by 888.
The Financial Action Task Force (FATF) has suspended Russia’s membership on the one-year anniversary of its full-scale invasion of Ukraine while confirming that Gibraltar will remain on its grey list.
The decisions were made at the second Plenary of the FATF in Paris, which includes members from over 200 jurisdictions worldwide.
“The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system,” the global financial oversight entity said.
The FATF said it will continue to monitor the situation and will review the restrictions at each Plenary meeting.
More progress needed
Meanwhile, iGaming hub Gibraltar will remain on the FATF’s grey list, as confirmed by the watchdog.
The British territory, known for its online gambling industry, was placed on the increased monitoring list in June 2022 due to its failure to apply adequate fines for anti-money laundering breaches.
Malta was removed from the grey list at the June meeting.
The FATF acknowledged that Gibraltar had implemented measures to improve the effectiveness of its anti-money laundering and counter terrorist financing (AML/CFT) regime.
In particular, the watchdog highlighted that supervisory bodies in industries such as gaming, law, real estate, and company management had taken effective action to address violations of AML/CFT regulations.
However, the FATF chose not to remove Gibraltar from the grey list and recommended that Gibraltar continues to implement its action plan, including pursuing more final confiscation judgments in line with the territory’s risk and context.
Nigeria and South Africa added
In addition, the FATF included South Africa and Nigeria to its list of jurisdictions under increased monitoring, which means that customers of financial institutions in these countries can expect to undergo more thorough due diligence examinations in the global banking and finance industry.
Nigeria is also an increasingly important market for the iGaming industry.
Stockholm-listed Betsson entered Nigeria in July 2022 following the acquisition of a 60% stake in local sportsbook Betbonanza.
The Gambling Commission (UKGC) has hit Aspire Global with a £237,600 fine for anti-money laundering failures.
The Malta-based operator – which powers 66 websites in the UK primarily on a white-label basis – also received an official warning and had conditions added to its licence.
Aspire was unable to prove it had carried out appropriate due diligence checks on six of its third-party white-label operator partners, according to the Commission.
The breaches were discovered following a licence review undertaken by the regulator, while the decision to impose a fine was made on 14 November.
In February 2022, the UKGC earmarked white-label partnerships as “high risk” for AML failings.
The regulator’s current guidance on the subject says: “Operators should also give due consideration to the money laundering risks posed by their business-to-business relationships, including any third parties they contract with.
“The assessment of these risks are based, among other things, on the risks posed to the operator by the jurisdictional location of their third-party and any relevant domestic anti-money laundering legislation they must comply with, transactions and arrangements with business associates and third-party suppliers such as payment providers and processors, including their beneficial ownership and source of funds.
“Effective management of third-party relationships should assure operators that the relationship is a legitimate one, and that they can evidence why their confidence is justified.”
The UKGC has this year dished out more than £45m in financial penalties to UK-licensed operators, mostly for AML and social responsibility breaches.
The Commission has ramped up its enforcement action in recent years. For comparison, the regulator imposed fines of just £1.7m against three operators throughout the entirety of the 2016/17 financial year.
Australia’s financial crimes regulator has launched investigations into Sportsbet and bet365 over suspicions they have failed to comply with the country’s anti-money laundering and counter-terrorism financing (AML/CTF) rules.
The Australian Transaction Reports and Analysis Centre (Austrac) has ordered the appointment of external auditors to assess Sportsbet and bet365’s compliance with Australia’s financial crime law.
In notices sent to Sportsbet and Hillside (Australia New Media) Pty Ltd, which operates as bet365, Austrac said it has “reasonable grounds to suspect” the two entities had contravened, or were contravening, Australia’s AML and CTF law.
In September, Austrac already kickstarted an investigation into Entain after suspecting similar compliance failures.
Sportsbet and bet365 external auditors are required to report to Austrac within 180 days and will assess whether the companies have adopted and maintained an AML/CTF programme that has risk-based systems and controls in place to effectively identify, mitigate and manage money laundering and terrorism financing risks.
Moreover, the auditors will undertake a risk assessment that considers the risk posed by the companies’ customer types, the types of designated services they provide and the methods by which they deliver those services.
Austrac CEO Nicole Rose: “Sportsbet and bet365 are amongst the largest operators in the corporate bookmaking sector. Austrac is putting the whole industry on notice to lift their game.”
The auditors will also ensure that Sportsbet and bet365 have a framework through which their boards and senior management have ongoing oversight of their AML programmes, while also checking that the firms are appropriately monitoring their customers with a view to identifying, mitigating and managing AML and CTF risks.
Austrac CEO Nicole Rose said non-compliance with the AML/CTF Act was a serious issue and that where systematic failings were identified, Austrac would intervene to ensure the integrity of Australia’s financial system.
“Sportsbet and bet365 are amongst the largest operators in the corporate bookmaking sector. Austrac is putting the whole industry on notice to lift their game.
“Ultimately, enforcing non-compliance is about protecting the community. Money laundering feeds organised crime and all the harm that comes with it.
“Austrac will not hesitate to take action where suspected non-compliance is identified, to protect businesses from being exploited and protect the Australian community from harm,” she added.
The financial crimes watchdog said the outcomes of the audit would assist Sportsbet and bet365 to comply with AML and CTF obligations, but it would also inform Austrac whether any further regulatory action was required.
The UK Gambling Commission (UKGC) has imposed a £672,829 fine on GGPoker licensee NSUS Limited for social responsibility and anti-money laundering failures.
NSUS – which trades as GGPoker in the UK – has also received an official warning for the breaches. The Gambling Commission has not revealed when the breaches occurred.
According to the regulator’s investigation, the operator failed to identify – and interact with – customers that may have been at risk of experiencing gambling-related harm.
GGPoker also sent marketing emails to 125 users that had self-excluded from gambling. The company did not take all reasonable steps to prevent such a breach, ruled the UKGC.
In March, Sky Betting & Gaming (SBG) was ordered to pay a £1.2m fine for a similar breach, when its Sky Vegas brand emailed a promotional offer to 41,395 self-excluded gamblers, as well as 249,159 individuals who had previously unsubscribed from marketing emails.
AML failures at GGPoker included failing to conduct adequate risk assessments of the business being used for money laundering and terrorist financing, as well as failing to ensure they had the appropriate policies, procedures and controls in place to prevent such crimes.
The fine was imposed on 22 September 2022.
Dublin-headquartered NSUS has been live in the UK with a remote casino licence since August 2017 and with a remote gambling software licence since July 2019.
GGPoker is the world’s largest online poker room, having overtaken Flutter Entertainment-owned PokerStars for that coveted title back in 2021.
It is one of the leading poker operators in the UK and offers the most popular online poker variants, including Texas Hold’em and Omaha, as well as unique poker variants such as fast-fold Rush & Cash, Flip & Go, Spin & Gold and All-In or Fold.
The site also offers traditional casino games such as Blackjack, Baccarat and Roulette.
The Gambling Commission has hit Betfred with a £2.87m financial penalty for social responsibility and AML failings.
The UK regulator took action against Petfre (Gibraltar) Limited, which trades in the UK as Betfred and powers the Betfred.com and oddsking.com domains.
There were no controls in place to prevent large levels of high spending by new customers, said the Gambling Commission in a statement.
One customer was allowed to lose £70,000 over a 10-hour period just one day after opening an account with the bookmaker.
The operator was also found to have set safer gambling interaction triggers too high, while account reviews were not conducted when a customer dramatically increased their spend.
For example, one customer was first contacted when they deposited £20,700 and lost £10,200. However, the next interaction did not occur until four months later, by which time the customer had deposited £323,715 and lost £69,371.
The company – which is based in English town of Warrington – also fell short of Gambling Commission guidelines on anti-money laundering.
The regulator said Betfred did not fully take into account the money laundering and terrorist financing (MLTF) risks connected to its business in regards to country or geographic area, customers, transactions, product and services.
MLTF thresholds were deemed “inadequate” by the Commission, with “insufficient” information on customers prior to financial markers being triggered.
Gambling Commission director of enforcement and intelligence Leanne Oxley: “We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.”
Betfred also failed to follow guidance issued by the regulator and did not provide adequate employee training, resulting in transactions that were not scrutinised in the proper manner.
Gambling Commission director of enforcement and intelligence Leanne Oxley said: “This is a further example of us taking action to investigate and sanction alarming failures.
“We expect this gambling business and all other licensees to review this case and look closely to see if they need to make further improvements to demonstrate active compliance.
“Where standards do not improve, tougher enforcement will follow,” she added.
The failings were identified following a review of the company’s operating licence and the breaches occurred between October 2019 and December 2020.
The Commission said Betfred co-operated throughout the investigation and took immediate corrective steps to address the failings.
The regulator found no evidence of criminal spend during its assessment.
In 2019, Betfred paid £182,000 in lieu of a financial penalty after another Gambling Commission investigation revealed the business failed to carry out adequate source of funds checks on a customer who deposited £210,000 and lost £140,000 of stolen money over a 12-day period in November 2017.
The European Gaming and Betting Association (EGBA) has published the first ever pan-European, self-regulatory guidelines to help iGaming companies comply with EU, national and supranational anti-money laundering (AML) rules.
The EGBA guidelines on fighting money laundering and terrorist financing apply a risk-based approach and contain best practice industry standards, which online gambling operators should apply across their entire EU and EEA operations.
While the guidelines are intended to complement and strengthen existing AML rules, they have also been developed with consideration towards the EU’s upcoming AML package, which contains new rules on AML procedures.
EGBA director of legal and regulatory affairs Ekaterina Hartmann: “Preventing online gambling from being used to hide the proceeds of crime is an important test for Europe’s gambling operators, but there’s currently very little sector-specific guidance to help operators.”
The guidelines include practical guidance on customer and business risk assessments, customer due diligence, suspicious transaction reporting requirements, the relationship between AML and safer gambling and record-keeping requirements.
EGBA’s director of legal and regulatory affairs Ekaterina Hartmann commented: “Preventing online gambling from being used to hide the proceeds of crime is an important test for Europe’s gambling operators – but there’s currently very little sector-specific guidance to help operators in their compliance efforts.
“We hope these guidelines will fill this gap and lay strong foundations for the sector to achieve the highest possible standards in AML compliance.
“It’s important to gather expertise across the sector and we invite stakeholder feedback on the guidelines to ensure that, together, the sector can contribute positively and proactively to Europe’s fight against money laundering,” she added.
The EGBA has invited stakeholders to submit feedback by 13 October, after which time the final guidelines will be published.
The EGBA currently represents bet365, Betsson Group, Entain, Flutter, Kindred Group, and William Hill; however, companies who are not members of EGBA are also invited to join the initiative.
EGBA members will be required to submit yearly reports to the EGBA summarising their progress in implementing the guidelines.
The Danish Gambling Authority has scolded Casumo for breaching local regulations on anti-money laundering identification and risk assessment.
The operator received the reprimand this week on 5 July, despite withdrawing its Danish licence and exiting the country’s online gambling market on 18 April 2022.
There is no obligation to act for Casumo. It had already updated its risk assessment procedure before handing in its operating licence, according to the regulator.
The DGA said Casumo did not sufficiently include identification and risk assessment of customer types and was particularly found lacking on temporary accounts.
The breaches applied for the period up until 11 March 2022.
However, the reprimand was also awarded for the period up until 18 April, because the Maltese online casino company did not risk assess its mobile app sufficiently in the eyes of the DGA.
“The Danish Gambling Authority assesses that Casumo has not had a risk assessment which sufficiently contributed to ensure that Casumo was not abused for purposes of money laundering or financing of terrorism,” said the regulator in a statement.
Breaches of the AML Act in Denmark often lead to an order or a reprimand from the regulator.
In serious or repeated cases, however, gambling firms can also be reported to the police, as sports betting operator Tipwin found out last month.
Denmark’s latest market data, which covers the month of May, saw the country’s regulated operators generate a combined DKK245.7m in GGR, the equivalent to €33m.