Dutch Gambling Regulator Takes Action Against Online Casinos for AML Violations

The Dutch gambling regulator, Kansspelautoriteit (KSA), has issued its first set of instructions under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) to the public following investigations into two online casinos, BetEnt and Play North. While the violations were discovered in 2022, the documents have only recently been made public.

Regarding BetEnt, a brand acquired by Entain in June 2022, the KSA initially sent a letter on 3 May 2022, announcing the Wwft investigation and requesting 15 player surveys. However, it was found that the player surveys supplied to the KSA were incomplete and lacked critical information. Certain dates were also missing on the paperwork, leading the KSA to believe that substantive risk analysis on players was conducted only after their request. BetEnt ultimately failed to meet anti-money laundering (AML) standards for 12 out of 17 players, including insufficient checks on players who lost significant amounts in a short period. BetEnt argued that the obligations under the Wwft were recent, but the KSA countered that the regulations were published in February 2021.

The KSA discovered that BetEnt's risk analysis procedures were inadequate or nonexistent, preventing them from monitoring player transactions and investigating the source of funds, thereby violating the AML Act. Some customer surveys lacked information on the source of funds, and certain transactions failing the Wwft were not reported promptly. BetEnt appealed the decision, claiming that the KSA did not highlight AML policies when they applied for their license, but the KSA responded by stating, "BetEnt has its own responsibility to comply with the applicable laws and regulations."

As for Play North, it was found that no investigations or actions were taken when players spent substantial amounts. The investigation found that Player A lost €135,000 in a month, Player B lost €20,000 in a day, and Player C deposited €25,000 within an hour and then proceeded to lose it over two months. However, the KSA also found difficulties when investigating the AML procedures at Play North, as the operator did not utilize a sufficient player management system. As such, the KSA could not be sure whether the player surveys had been altered after the fact, once they had been compiled for the investigation.

Both operators appealed the decisions but were ultimately denied. They were instructed to make amendments to the violations in November 2022, although the outcomes of these actions are currently unclear.

The cases highlight the importance of complying with AML regulations in the gambling industry and the need for robust player management systems to track transactions effectively.

By fLEXI tEAM