Spelinspektionen, the Swedish Gambling Authority, has released guidelines for licence holders detailing ‘common risks’ and suggestions of how some online games can be used for money laundering and terrorist funding.
Spelinspektionen also provided some of its own comments on the measures previously taken by operators to counter money laundering, stressing that when they first open an account, operators must allocate a risk level to customers.
The regulator highlighted previous failures to create established rates of risk, which subsequently complicated the detection of customer behavioural irregularities. This also noted that Sweden ‘s average estimates of household spending would help inform the risk rates.
The Instructions read: “One of the characteristics of online gambling are large cash flows. Depending on the game, this can be carried out through a number of small transactions or larger, but fewer, transactions. To be allowed to play, customers need to register and identify themselves using e-identification or equivalent.
“This creates great opportunities for gambling companies to verify the identity of the customer. However, the use of other people’s identities has become an increasingly common feature in various money laundering schemes, which is why it is necessary to remain extra vigilant. To gamble online, the customer also needs to have a gambling account.
“All transactions made to and from the gambling account are registered. This facilitates the gambling companies’ monitoring activities. However, the gambling account itself is associated with particular risks given that it can be used for purposes other than gambling, such as for storing or transferring money.”
According to the regulator, tracking of a player’s deposits or stakes may be crucial to determining whether a player should be listed as high-risk. When this happens, Spelinspektionen added that additional steps will be taken at the earliest opportunity.
“For example, data on taxable income may be appropriate to collect for a normal-risk player while further verifications and direct contact with the customer are required to find out where the client’s money comes from if they are high-risk,” it explained.
Finally, the regulator said an efficient way to minimise the possibility of money laundering or terrorist financing is by allowing only “closed-loop” transactions, whereby the client is the only one who can withdraw from the account from which a deposit was made.
The report was developed and drawn up by the Swedish Gambling Authority in cooperation with the Swedish Financial Intelligence Unit and the Anti-Money Laundering and Countering Financing of Terrorism Coordinating Body.