SBC News Videoslots to contest Swedish AML investigation 

Videoslots to contest Swedish AML investigation 

 Spelinspektionen, the Gambling Inspectorate of Sweden, has issued a warning and penalty fee of SEK 9m (€750k) on Videoslots for failure to uphold protections of Sweden’s Money Laundering Act.

The Inspectorate had placed Videoslots under supervision on 2 November 2021, citing “shortcomings in the work against money laundering and financing of terrorism”. 

Under scrutiny, Videoslots is reported to have insufficient knowledge related to upkeeping customer AML protections, as the operator had failed to carryout adequate risk profiles and enhanced customer due-diligence checks.  

The investigation saw Spelinspektionen review Videoslots’ handling of potential money laundering risks, examining the top 30 customers by deposit frequency, and top 50 by deposit amount during Jan-Mar 2020 and 2021.

Of the segment, Spelinspektionen randomly selected 10 customers, in which eight deposited between SEK 1m and SEK 5.5m and two deposited SEK 570,000 and SEK 620,000.

Videoslots is accused of serious compliance failures, as the operator allowed flagged customers to continue to deposit money, despite not to verify KYC demands.

The operator was further criticised for being slow to gather source of funds and income levels for these customers. Videoslots responded by recognising that the 10 audited customers did not reflect well on its compliance standards and has since increased investment and resources by 10x.

However, Videoslots cited that the Spelinspektionen investigation was flawed as deposits could be funded by previous gambling winnings, not just a player’s annual income.

Of significance, the operator stated that rules on customers notifying their employment and desired wagering amounts had only been adopted from May 2022.

Since February 2022, Videoslots has implemented spending limits, including mandatory loss limits and a net deposit limit of SEK 200,000 per month, adjustable only with evidence of the source of funds.

Videoslots cites that it will contest Spelinspektionen’s penalty fee of SEK 9m based on Videoslots’ GGR and the severity of the violations.

In September, Finansdepartementet – the Ministry of Finance of Sweden – ordered  Spelinspektionen to “adjust penalty fees for gambling operators violating AML legislations” from 1 April 2024.

The demand equates to penalty fees for AML infringements, in which Spelinspektionen must specify a ‘maximum amount’ for violations under the rules interpreted by the Gambling Act of 2018.

 

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