The Dutch gambling regulator, Kansspelautoriteit (KSA), has unveiled its first set of instructions under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) to the public. This move comes in the wake of upheld decisions against two online casinos, BetEnt and Play North, following violations detected in 2022. Although the investigations took place last year, the documents have only recently been made public.
BetEnt’s Compliance Issues:
BetEnt, which was acquired by Entain in June 2022, faced scrutiny from the KSA for multiple compliance failures.
The KSA initiated a Wwft investigation in May 2022, requesting 15 player surveys from BetEnt.
Subsequently, it was revealed that these player surveys lacked essential information and key dates, raising suspicions of belated risk analysis.
In August, BetEnt provided inadequate evidence for the investigation, and when player data was finally submitted, 12 out of 17 players failed anti-money laundering (AML) standards.
These failures included insufficient checks on players who incurred losses ranging from €12,000 to €110,000 in a single month.
BetEnt claimed that the Wwft obligations were recent, but the KSA countered by highlighting the regulations published in February 2021.
BetEnt’s risk analysis procedures were either deficient or nonexistent, preventing proper transaction monitoring and source-of-funds investigations.
During the investigation, it was discovered that five client surveys lacked a source of funds, and three non-compliant transactions were not promptly reported to the KSA.
BetEnt’s appeal arguing that the KSA did not emphasize AML policies during the licensing process was refuted.
The KSA emphasized that BetEnt has its own responsibility to adhere to laws and regulations, regardless of the regulator’s explicit mention of AML policies.
Despite BetEnt’s subsequent AML improvements, the initial infractions remain subject to enforcement.
Play North’s AML Shortcomings:
Play North was investigated for not taking any actions when players made substantial deposits and losses on its platform.
The KSA discovered that Player A lost €135,000 in a month, Player B lost €20,000 in a day, and Player C deposited €25,000 within an hour and subsequently lost it over two months.
Play North’s inadequate player management system posed challenges to the KSA’s investigation, as alterations to player surveys post-compilation could not be ruled out.
Play North has since implemented the Jira Player Management System to enhance player tracking and transaction monitoring.
Appeals and Ongoing Amendments:
Both BetEnt and Play North appealed the decisions against them but were ultimately denied.
In November 2022, both operators were instructed to rectify the violations, and the outcomes of these corrective actions remain pending.
The KSA’s release of instructions under the Wwft marks a significant step in strengthening AML and counter-terrorist financing efforts within the Dutch gambling industry. The cases of BetEnt and Play North highlight the regulator’s commitment to upholding stringent AML standards and ensuring operators’ compliance with existing regulations. These developments underscore the importance of proactive AML measures and adherence to regulatory guidelines in the evolving landscape of online gambling.