The Danish gambling regulator Spillemyndigheden has taken action against gaming operator SkillOnNet, issuing multiple injunctions and charges due to non-compliance with anti-money laundering (AML) regulations. The standoff between the regulator and the operator signals Denmark’s continued resolve to enforce stringent AML frameworks within the gambling sector.
SkillOnNet presented materials to Spillemyndigheden, ostensibly demonstrating adherence to the Money Laundering Act. However, upon review, the regulator identified substantial inadequacies, leading to the issuance of three injunctions. The infractions pertained to insufficient documentation of control checks, the inadequacy of business procedures for internal controls, and failure to enact robust risk assessments—infringements that are critical under the Money Laundering Act.
In addition to the injunctions, SkillOnNet also stands accused of violating regulations concerning business procedures and the rules governing the whistleblower scheme. The directive necessitates SkillOnNet to take corrective actions, demanding a submission of an updated risk assessment and revised business processes for checking internal controls within a two-month timeframe. Moreover, the company must also provide proof that checks on internal controls have been effectively executed.
The significance of the risk assessment, business procedures, and whistleblower arrangements under the Money Laundering Act underscores the gravity of SkillOnNet’s breaches. As explained by Spillemyndigheden, these elements are foundational to the act’s framework, thus justifying the regulatory response of injunctions and prosecutions.
Digging into the details of the operator’s shortcomings, one injunction arose from SkillOnNet’s risk assessment not substantially covering potential risks associated with the company’s business model, payment solutions, and product offerings. This represented a breach of section 7 of the Money Laundering Act, centered around risk assessment obligations.
Furthermore, SkillOnNet’s written business procedures did not clearly define the methods, timing, or responsible parties for performing checks to ensure the enactment of internal controls, as required by section 8 of the Money Laundering Act—this resulted in the second injunction, Order B. Order C highlighted SkillOnNet’s failure in documenting that such checks had been performed.
Spillemyndigheden’s charges were equally stern. Charge A derived from defective business procedures for establishing customer relationships up to October 16, 2023. A gap between the company’s procedure and practice led to inadequate customer familiarization efforts, breaching section 10 of the Money Laundering Act. The failure to properly screen for politically exposed persons or their close associates also constituted a violation of section 18.
Charge B addressed the lack of anonymity in SkillOnNet’s whistleblower scheme, which only accepted reports via email, thus not aligning with section 35 of the Money Laundering Act. This section mandates that employees must have the capacity to report money laundering violations anonymously and through independent channels.
The regulatory tenor of Spillemyndigheden has toughened in terms of AML enforcement, evidenced by its continued crackdown initiated in July 2022 in accordance with the justice ministry’s new strategic stance. In a landmark case, operator Tipwin was fined DKK100,000 during 2023 for infringements similar to those of SkillOnNet, including laxities in risk assessments, policies, and internal controls. Other gambling entities like Casumo, Casino Copenhagen, and Bet365 have also faced injunctions for AML-related reasons.
While anti-money laundering remains a focal point, Spillemyndigheden has not overlooked illegal gambling. Its latest report elucidates the counteraction of unlawful activities spanning online and land-based sectors within Denmark, citing the blockade of 49 illegally operating websites including high-profile operator Stake.com following a court order.
SkillOnNet, reeling from its Danish regulatory woes, also faces repercussions from the UK’s Gambling Commission. It was ordered to pay £305,150 for AML and social responsibility failings, as part of a settlement agreement directing the funds towards socially beneficial causes. A regulatory review of SkillOnNet by the Commission unveiled parallels in non-compliance with Licence Conditions and Codes of Practice (LCCP), spotlighting gaps in policies, procedures, controls, and practices related to AML and responsible gambling.
