The Kansspelautoriteit (KSA), the Dutch gambling regulator, has released the first set of instructions under the Money Laundering and Terrorist Financing (Prevention) Act (Wwft) to the public after the decisions against two online casinos were upheld.
The investigations were held into BetEnt and Play North for violations discovered in 2022, although the documents have only just been released.
BetEnt
It was found that the KSA first sent BetEnt, a brand acquired by Entain in June 2022, a letter on 3 May 2022 announcing the Wwft investigation and requesting 15 player surveys
However, the KSA found that not only were the player surveys supplied to them missing critical information, but certain dates were missing on the paperwork.
This led the KSA to believe that a number of substantive risk analysis was completed on the players only once the KSA had requested them.
As such, the KSA requested the original documents so that it could conduct its official investigation with the correct evidence.
In August, BetEnt once again sent over inadequate evidence for the KSA to work with. Finally, when the player’s data was sent to the KSA, it was found that 12 out of 17 had failed AML standards.
These include insufficient checks on players who lost between €12,000 ($12,902) and €110,000 in one month.
“The KSA emphasises that employees of gaming providers must continue to realise that although sometimes large amounts of money are played, spending large amounts of money on games of chance in society is only for a small group of people”
BetEnt claimed that: “The obligations that apply to licence holders under the Wwft have only recently applied since the opening of the online gaming market.” However, the KSA countered this by pointing out that the regulations were published as early as 8 February 2021.
It was found that BetEnt’s risk analysis procedures were either severely lacking or not present, as BetEnt could not guarantee that it could monitor the transactions of the players.
This meant that BetEnt could not investigate the source of the funds, therefore failing the AML Act Article 3, Paragraph 2, (d).
During its investigation, the KSA found that five client surveys had no source of funds provided, despite the fact that they were younger customers with high net losses.
A further three transactions that failed the Wwft were also not reported to the KSA in a timely manner, failing Article 16 of Wwft
BetEnt claimed in its appeal that when it applied for its licence from the KSA, the institution did not highlight the AML policies, so the operator assumed that its policies were sufficient.
The KSA replied: “BetEnt has its own responsibility to comply with the applicable laws and regulations.”
Although BetEnt emphasised that it has since tightened up on AML, such as hiring a new team, the KSA will enforce the decision as the initial infraction still occurred.
In its reply, the KSA stated: “In addition to recruiting new staff and taking charge of customer due diligence, BetEnt has only referred to its new and most current AML policy.
“The KSA clarifies that the fact that the money comes from a regulated institution does not automatically mean that the gaming provider does not have to conduct an independent investigation”
“However, having a new AML policy in itself is insufficient. What matters is how this policy is applied in practice.
“The efforts made by BetEnt by no means make it clear whether the violations have also been terminated by BetEnt in practice.”
Play North
As for Play North, it was found that no investigations or actions were taken when players spent large amounts of money on the platform.
The investigation found 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 then proceeded to lose it over two months.
However, the KSA also found difficulties when investigating the AML procedures at Play North, as the operator did not utilise a sufficient player management system.
As such, the KSA could not be sure whether the player surveys had been altered after the fact, once they had been compiled for the investigation.
Following this, Player North has since employed the Jira Player Management System to help track players and transactions.
Conclusion
Both operators appealed against the decisions made against them, but were ultimately denied.
BetEnt and Play North were instructed in November 2022 to make amendments to the violations, although the outcomes of this are currently unclear.
