Anti-Money Laundering and Financing of Terrorism Laws

Spelinspektionen, the Swedish gaming authority, recently carried out an investigation into Videoslots amid suspected Anti Money Laundering (AML) failures, and as a result of that investigation, a penalty fine of SEK9m (£663,575/€760,000/$808,809) was issued to the Malta headquartered gambling group.

Failures branded as “serious and systematic” by Spelinspektionen led to the substantial penalty fine, but what exactly where those failures?

Videoslots who is also licensed in several other jurisdictions – Malta, Great Britain, Denmark, Italy and Spain to be precise, was found to have not met customer knowledge requirements plus, of the 10 largest (spending) customers (between 2019 and 2021) who were plucked at random, it was concerning to investigators that all ten had discrepancies between their income and gambling transactions. Among those was a customer who after an initial risk was observed, went on to deposit over SEK5m during the 2019/2021 period despite an income of just SEK57,000.

Breach of Numerous Rules:

Not only did Videoslots fail to take adequate enhanced customer awareness measures in a timely manner, but they also failed to document and preserve data regarding those enhanced customer awareness measures.

While investigations were being conducted Videoslots did act to amend those systems however, although the online casino was cooperative, Spelinspektionen felt they did not actively facilitate the investigation.

Holding their hands up, Videoslots admitted that those customers did not represent the high level of compliance that the operator strives to achieve, however, they also stated that the AML rules were there for them to report suspicious activity to the financial intelligence specialists. Spelinspektionen responded to this by stating the operator itself has a duty to detect and deter activities that are deemed to be suspicious.

“Videoslots has not worked sufficiently proactively and risk-based to be able to ensure that customer knowledge is up to date and sufficient to be able to assess and counter the risk of the company being used for money laundering and financing of terrorism,” read Spelinspektionen’s decision.

“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.”

What is money laundering?

The Anti-Money Laundering and Terrorist Financing Act (Money Laundering Act) is a law aimed at preventing and counteracting the financial sector, the gambling sector and several other industries from being used for money laundering or terrorist financing. Chapter 1, Section 6 of the Spelinspektionen Money Laundering Act states that: For the purposes of this Act,” money laundering” means measures relating to money or other property arising from criminal offences or activities which

1. may conceal the connection of the property with crime or criminal activities
2. may promote the possibility for someone to assimilate the property or its value
3. may promote the possibility for someone to evade legal sanctions
4. means that someone acquires, holds, claims the right to or uses the property.

What is terrorist financing?

Terrorist financing means financially supporting terrorism. This involves more than just contributing money. Terrorist financing also involves raising, providing and receiving money to be used for terrorism. Terrorism is often financed by money of legal origin, which makes it particularly difficult to detect.

Source:

“Videoslots Punished in Sweden Over “Serious” AML Failures”, igamingbusiness.com, November 2, 2023.