Videoslots Hit with Fine Over AML Lapses by Swedish Regulator

In a decisive move, Sweden’s Spelinspektionen levies a substantial fine on Videoslots for non-compliance with stringent AML directives.

As the regulatory magnifying glass scrutinizes the operator’s customer interactions, revelations of significant discrepancies in due diligence emerge, bringing AML practices to the limelight.

While facing financial repercussions, Videoslots is recognized for its concerted improvements, reflecting a commitment to rectifying the compliance course and fortifying its operations against misuse.

Industry peers and consumers alike are called to observe the tightened regulatory grip, as Videoslots’ experience serves as a critical compliance touchstone in the gambling sector.

The Swedish gambling regulator, Spelinspektionen, has imposed a penalty of SEK9m (approximately €760,000) on Malta-based gaming company Videoslots for breaches in anti-money laundering (AML) and counter-terrorism financing laws, spotlighting gaps in the operator’s adherence to customer knowledge requirements.

Upon examination of customer activity from 2019 to 2021, a disturbing mismatch between customer deposits and reported incomes was uncovered, with one case showing a deposit of over SEK5m against an income of merely SEK57,000. The lapse allowed continued significant transactions for two years post initial risk identification by Videoslots.

Responding to the penalty, Videoslots argued that the selected cases were outliers and not reflective of their overall compliance efforts. They emphasized their routine reporting of suspicious activities to Sweden’s financial watchdogs. Nevertheless, Spelinspektionen stood firm, reiterating the operator’s obligation to conduct thorough investigations to mitigate the risks of money laundering and terrorism financing, citing multiple infringements of the Money Laundering Act.

Despite acknowledging Videoslots’ cooperative stance and the improvements made, Spelinspektionen noted the efforts were not sufficiently proactive or risk-based, leading to outdated and inadequate customer knowledge. The implication of such shortcomings could result in potential exploitation of the company’s services for illicit ends.

In parallel, the Swedish Ministry of Justice is sharpening its legislative tools by proposing stricter credit rules for the gambling industry. Echoing these sentiments, the trade association Branschföreningen för Onlinespel (BOS) has expressed backing for the reforms aimed at prohibiting the promotion of third-party credit sources by gambling operators, reinforcing responsible gambling ethos.

A cornerstone of the proposed reforms is the establishment of the Skri Register, a novel credit and debt ledger, ensuring enhanced monitoring and control over credit-related gambling activities.

The case of Videoslots serves as a pivotal reminder of the perpetual evolution of regulatory frameworks within the gambling domain, underscoring the imperative for operators to maintain rigorous compliance protocols and customer knowledge systems to uphold the integrity of the industry.

Tags: #Videoslots, #AMLRegulations, #SwedishGamblingRegulator, #Spelinspektionen, #Compliance, #GamblingIndustry, #MoneyLaunderingAct, #FinancingOfTerrorism, #GamblingLicence