Compliance with national anti-money laundering regulations is mandatory for all licensed entities within the Dutch jurisdiction. This requirement is particularly stringent for those operating within the gambling sector, as evidenced by the recent punitive action taken by the Kansspelautoriteit (KSA), the Netherlands’ gambling regulator, against the operator BetCity. The enforcement stems from BetCity’s failure to adhere to the stringent measures outlined in the country’s Money Laundering and Terrorism Financing Prevention Act (Wwft), highlighting the importance of vigilant regulatory oversight in the industry.
The lapses in BetCity’s operational conduct were first brought to the KSA’s attention in September of the previous year, following customer complaints that raised red flags about potential breaches. These indications of non-compliance were alarming, with BetCity failing to investigate the origins of funds for players exhibiting significant losses. Examples of such oversight included instances where individuals lost exorbitant sums, ranging from €25,000 to €110,000 in a single month, or €85,000 over half a year, without the operator intervening. This pointed to a severe deficiency in BetCity’s capacity to monitor customer behavior on a continuous basis, which is a fundamental expectation of regulated entities.
In a similar vein, PlayNorth Limited faced rebuke for comparable shortcomings. These cases marked the first instance in which the KSA disclosed sanctions associated with transgressions of the Wwft. Upon scrutinizing the situation, the KSA provided BetCity with guidance on how to rectify their control processes. Furthermore, the regulator made clear that it would remain vigilant in ensuring that BetCity followed through with the necessary compliance measures.
Despite these directives, an assessment conducted between December 2022 and May 2023 concluded that BetCity inadequately conducted customer surveys, falling short of the standards mandated by the KSA. In multiple cases, the KSA found that investigations into potential breaches only commenced after considerable losses had been incurred. The operator was also criticized for its lackluster approach to requesting proof of income from customers. Consequentially, BetCity’s subsequent actions—or lack thereof—often meant that unusual transactions went unreported.
Given the gravity of these infractions, the KSA imposed a formidable penalty of €3.0 million. René Jansen, chairman of the KSA, sternly articulated the regulator’s stance, stating that licensed providers had been previously warned to get their Wwft affairs in order swiftly and that non-compliance would inevitably lead to sanctions. “We’re now following up on this,” Jansen remarked. “We are really out of the start-up phase of the market, and that also means that there are no more excuses for some things.”
The infraction by BetCity, which falls under the corporate umbrella of its parent company BetEnt, comes following their acquisition by the gaming conglomerate Entain in January this year. Entain’s purchase of BetCity was a significant investment, with an up-front payment of €300.0 million and a delayed contingent consideration that could reach an additional €550 million. Responding to the news of the fine, Entain acknowledged the investigation pertained to the period between December 2022 and February 2023. This is based on earlier instructions issued by the KSA to BetCity in September 2022; a detail Entain was cognizant of before finalizing the transaction. Post-acquisition, Entain committed to implementing improvements to BetCity’s procedural and control frameworks. Entain expressed its intention to collaborate with regulators across all markets it operates in to secure the highest player protection standards.
The fine levied on BetCity only adds to the regulatory scrutiny faced by Entain. Only a week prior, Entain disclosed that it had reached an in-principle settlement with the Crown Prosecution Service (CPS) over historical activities based in Turkey. This Deferred Prosecution Agreement (DPA) amounts to £585.0 million, consistent with terms agreed upon in August. Additional payments include a £20.0 million charitable contribution and £10.0 million to cover CPS and HMRC costs, to be disbursed across the four-year term of the DPA.
This is not the first time Entain has encountered regulatory repercussions. In August 2022, the GB Gambling Commission ordered Entain to pay a record £17 million for failing to meet social responsibility standards. Further non-compliance could result in Entain’s license being revoked—a stark reminder underscored by Commission chief executive Andrew Rhodes. Furthermore, Entain settled for £5.9 million for concurrent failures in 2019, amplifying the significance of regulatory adherence for gambling operators.
