A recent financial intelligence report by Europol states that the agency could be ramping up their iGaming investigations, particularly those based on the international iGaming hub of Malta. As part of an ongoing crackdown on Italian organized crime, property and six iGaming companies on the island were seized and their licensing revoked. The companies were allegedly laundering money for the ’Ndrangheta, a branch of the Italian Mafia. After strengthening the fourth EU Anti Money Laundering Directive (AMLD) and the successful disruption of a 2 billion euro money laundering operation in 2015, Europol will no longer turn a blind eye to legal discrepancies in online gaming.
How will smart iGaming operators ensure they are following the changing laws? Can you safely say you’re doing the following to protect your business?
Staff training:
Do you train your staff regularly on anti-money laundering/combating the financing of terrorism (AML/CFT) controls? Is there a clear reporting channel for staff to raise any suspicions they may have? Front-line staff are usually the first to spot discrepancies and can point out any unusual behavior or activity. Do they know they should raise any concerns they have? Unusual but internally allowed transfer activity or repeated contact from numerous accounts in different names asking for the same unusual request are two examples of activity that could be worth further investigation based on the nature of your operation. Make sure your front-line staff is not afraid to raise concerns at the expenses of hitting their targets. Empowering staff to take a reasonable extra step from time to time to protect the business is a great way to evidence your commitment to having a robust AML/CFT program at all business levels.
Submitting STR/SARs:
Is your organization submitting suspicious transactions or activity reports to the relevant body for review? If you are not, but have a reasonably sized player base, it is likely that the above training and reporting is not in place or staff are not aware of their obligations. Of course, there is a balance between reporting genuine suspicious activity and flooding your regulator with false positives. This is the job of your MLRO to filter. If you are not passing on any reports, it is a likely sign that something in your AML/CFT framework is amiss.
KYC/EDD:
Know Your Customer (KYC) and completing enhanced due diligence are an absolute must to protect your business. The fourth EU AMLD still maintains a risk-based approach. Not completing due diligence in an effective and timely manner is a surefire way to putting your company in line for punitive measures, should a regulator come knocking on your door.
Most compliance functions, like the above, can be outsourced to a reputable solution provider like Integrity
from Aristotle. This leaves your business free to pursue daily operations knowing that you are covered by the trusted global leader in compliance, currently protecting eight of the top 10 iGaming operators.
No matter your market or regulatory jurisdiction, you can request a free consultation or review of any of the above. Just drop me a line and we’d be happy to help you safeguard your business (and yourself!) from the cost of noncompliance.
Ben Jordan
Director, Aristotle International