Report: Swedish online casinos at “high” risk of money laundering
Comprehensive review of Swedish business sector lifts lid on gambling sector’s vulnerabilities
Sweden’s online gambling market is vulnerable and at a “high” risk of money laundering, according to a cross-agency review of AML standards published by the country’s National Police Authority (NPA).
In a comprehensive review of standards across the country’s financial sector, the NPA suggested that high stakes, potential for profits and high turnover by operators can create “relatively attractive” conditions for money laundering.
“Money can also be laundered quickly as gaming companies offer fast transactions and fast registrations of new gaming accounts,” the report claimed.
“Despite existing control systems, it is in the nature of things that the risk increases in operations with many transactions and high turnover.
“There is also a risk that people will form gambling companies for the purpose of laundering money from criminal businesses. These schemes risk becoming increasingly advanced and difficult to detect.
“The ownership structure of gaming companies can be very complex where the parent company can be located in countries outside the EU, with principals which are difficult to secure and identify,” the report added.
The NPA suggested an operator’s ability to trace player funds which may have come from fraudulent means is generally a positive, but the ability to use gaming accounts to deposit funds from various sources impedes the tracing process.
Researchers highlighted the ability of Swedish-licensed operators to use bank accounts outside of the EU as a potential obstacle in tracing fraudulent funds.
Many of Sweden’s biggest banks are turning away from accepting gambling company accounts on grounds of the increased AML risk.
In March, Mr Green parent operator William Hill filed a complaint with Swedish authorities after Swedish bank SEB served notice that it would terminate the firm’s corporate banking account due to these risks.
“It is a challenge for operators and criminal investigations authorities to understand and discover the chain of transactions, from the time the money is deposited in an account, on to a gaming account and then back to a bank account,” the NPA report claimed.
“All games must be in Swedish kronor, but money risks quickly changing shape when depositing and withdrawing from a gaming account,” the report added.
The review covered 24 different sectors of Sweden’s financial industry, including banking and real estate.
It was co-authored by several high profile agencies and regulators including the Swedish Gambling Authority (SGA), Financial Inspectorate and the Swedish Prosecution Authority.