The Swedish Gaming Authority, Spelinspektionen, has issued a stern warning and imposed a penalty fee of SEK 9 million (approximately $810,000) on Videoslots for its significant lapses in addressing money laundering and financing terrorism concerns. Videoslots, which obtained its Swedish license on December 4, 2018, has come under scrutiny due to compliance issues with the Money Laundering Act, culminating in this substantial penalty.
Investigation into Compliance:
An investigation was initiated on November 2, 2021, to evaluate Videoslots’ adherence to anti-money laundering regulations. The focus of this investigation was ‘Customer One,’ who had joined the platform on January 1, 2019. This player had deposited approximately SEK 5.5 million over the course of a year, spread across more than 1,800 sessions, with frequent withdrawals. Concerns arose when the customer could not provide adequate documentation for the source of their gambling funds. Consequently, the account was suspended on August 1, 2019, and a report was forwarded to the Videoslots Money Laundering Reporting Officer.
Questionable Actions by Videoslots:
Despite these red flags, Videoslots made the questionable decision to reopen the customer’s account on August 20, 2019, citing ‘business decisions.’ Subsequently, after conducting an internal investigation, the operator concluded that there was no need to track the account for anti-money laundering (AML) activities.
A similar situation unfolded with ‘Customer Two,’ who had deposited SEK 3.9 million over two years. Videoslots, however, failed to investigate the matter effectively. The official report from Videoslots stated that there was “still no clear info about his possible occupation” and mentioned only a board position in a cleaning company, along with earnings above the average income in the area.
Additional Failures and Lapses:
The regulatory inquiry uncovered other instances, such as ‘Customer Three,’ who deposited up to SEK 600,000 within 12 days. Videoslots identified that the customer had a prior prosecution record but placed the account on monthly monitoring instead of taking more decisive action. A year later, Videoslots reviewed the customer’s income, revealing earnings of SEK 215,228 from their official job for the year.
The report from Spelinspektionen detailed a total of ten customer experiences illustrating significant concerns over Videoslots’ compliance.
Penalty Determination:
Due to the inability to accurately assess the penalty fee based on Videoslots’ revenue, the Spelinspektionen opted to impose the maximum penalty fee of SEK 11.8 million. However, they adjusted the fee to SEK 9 million considering the available information about the company’s financial position.
The penalty imposed on Videoslots by the Swedish Gaming Authority underscores the importance of stringent anti-money laundering and counter-terrorism financing measures in the iGaming industry. It serves as a reminder to operators about the need for rigorous compliance to ensure a secure and transparent environment for both players and the industry as a whole. This incident also highlights the significance of robust regulatory oversight to maintain the integrity of the gaming sector.