Danish Gambling Authority issues warning to Reel Denmark over money laundering breach

The Danish Gambling Authority (DGA) has reprimanded Reel Denmark for breaching the rules on know your customer (KYC) measures of the Anti-Money Laundering Act.

The reprimand was given because Reel had let a player deposit DKK 2.4m (£270,342) to his account in 2019 and 2020 without checking whether this money originated from criminal proceeds.

This player only came to the attention of the authorities in summer 2021 after the DGA did a random spot check concerning responsible gambling and money laundering. At that point, Reel requested data on the player’s income and employment. The operator concluded that the player’s salary could finance his activity, despite depositing more to his account than he was receiving once tax was deducted from his salary.

The DGA assessed that Reel had breached the rules of KYC measures by not getting this data sooner. However, the DGA also concluded that Reel should have requested the player’s circumstances since the data on income and employment was not sufficient to disprove the suspicion of money laundering. Consequently, Reel was found to have breached the rules on its duty to investigate the player.

The reprimand was also given because the Dutch regulator found that Reel should have suspected or had reason to assume that the player’s transactions might be related to money laundering. Reel should have reported the matter to the Money Laundering Secretariat (MLS) immediately based on the player’s activity. However, Reel only brought the issue to the attention of the MLS on 18 January 2022, following the DGA consulting the firm on the case, and about two years after suspicion arose, which could not be disproved.

This reprimand does not subject Reel to respond in any way, since Reel has introduced new business procedures for KYC measures and the obligation to investigate to avoid similar incidents happening in the future.