The Danish Gambling Authority, Spillemyndigheden, has recently taken action against the online casino operator, SkillOnNet, for multiple breaches of the nation’s Anti-Money Laundering (AML) Act. This incident underscores the importance of robust AML measures in the gambling industry and the consequences of non-compliance.

Spillemyndigheden issued three orders and two reprimands to SkillOnNet, following an inspection of the company’s compliance with the AML Act1. These punitive measures were not only a response to the identified breaches but also a call to action for SkillOnNet to rectify its AML procedures.

The first order was issued due to an inefficient risk assessment process. The Danish Gambling Authority found that SkillOnNet had not conducted separate risk assessments for the individual risks associated with its business model, including its products and payment solutions1. This was a breach of Section 7(1) of the AML Act, which requires companies to identify and assess the risks of money laundering and terrorist financing that they may face.

The second order was related to inadequate business processes. Specifically, SkillOnNet was found to be lacking written records that confirmed the implementation of internal controls. This was deemed a violation of Section 8(1) of the AML Act, which mandates companies to establish and maintain adequate policies, controls, and procedures to mitigate and manage effectively the risks of money laundering and terrorist financing.

The third order was due to SkillOnNet’s failure to document the internal controls it had implemented1. This was also a breach of Section 8(1) of the AML Act.

In addition to these orders, Spillemyndigheden issued two reprimands to SkillOnNet. The first reprimand was due to inadequate business practices. Prior to 16 October 2023, SkillOnNet’s procedures for establishing relationships with customers were found to be inefficient1. There was a discrepancy between the company’s business procedure and practice, which was deemed to have breached several sections of the AML Act, including Section 8(1) and Section 18(1).

The second reprimand was related to SkillOnNet’s whistleblower scheme, which until June 2023, was only accessible via email. This removed a significant level of anonymity, which is crucial for protecting whistleblowers. This was deemed a breach of Section 35(1) of the AML Act, which requires companies to establish appropriate procedures for their employees to report violations internally through a specific, independent, and anonymous channel.

Following these orders and reprimands, SkillOnNet is now obligated to submit a revised risk assessment and other required materials within two months1. The company must also provide proof of internal implementation as a document within six months.

This incident serves as a reminder of the importance of robust AML measures in the gambling industry. Companies must ensure that they have effective risk assessments, business processes, and whistleblower schemes in place to comply with AML regulations and protect their operations from the risks of money laundering and terrorist financing.

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