Spillemyndigheden’s decision came after SkillOnNet provided the regulator with material which it believed complied with anti-money laundering (AML) regulations.
However, the material was found to be worthy of three injunctions. These were for violations of the Money Laundering Act’s rules on documentation of completed controls, business procedures for internal controls and risk assessments.
Meanwhile, Spillemyndigheden also charged SkillOnNet for breaching regulations on business procedures, as well as rules on the whistleblower scheme.
The injunction orders necessitate an obligation to act from SkillOnNet. The company must submit a revised risk assessment and business process for checking internal controls within two months. Additionally, SkillOnNet must also submit documentation ensuring that checks on internal controls have been conducted.
Spillemyndigheden noted: “Adequate risk assessment, business procedures and whistleblower arrangements are fundamental to the Money Laundering Act and the seriousness of the breach has therefore led to three injunctions and two prosecutions.”
In a statement shared with iGB, SkillOnNet said it was surprised by the Spillemyndigheden’s decision.
“SkillOnNet Ltd maintains high AML standards in Denmark, as it does in all markets where it operates,” the statement read. “The orders are entirely regarding more detail in the description of procedures and SkillOnNet suspects there is possibly a misunderstanding.
“We have engaged with the DGA [Danish Gaming Authority] to fully understand what they consider to be the improvements which have to be made.”
A closer look at SkillOnNet’s breaches in Denmark
The first injunction was handed down because of SkillOnNet’s deficient risk assessment, which was found to have not addressed risks on the company’s business model, including payment solutions and products, thus breaching the obligation on risk assessments in section 7 of the Money Laundering Act.
Injunction order B was related to section 8 of the Money Laundering Act. It concerned the failure of SkillOnNet’s written business procedures to convey how and when, as well as by whom, checks are undertaken to ensure internal controls are conducted. Order C, meanwhile, was given due to SkillOnNet’s failure to document those checks had been carried out.
In regards to the two charges, Spillemyndigheden outlined “defective” business procedures for establishing customer relationships until 16 October 2023 as the reason for the first charge. This was down to a discrepancy between business procedure and practice, with the company’s customer familiarisation procedures carried out at inappropriate times, a breach of section 10 of the Money Laundering Act.
Charge A was also decided upon because of SkillOnNet’s failures to conduct screenings, as outlined by section 18 of the Money Laundering Act, to identify politically exposed persons, or close associates or business partners, for customers who hadn’t paid over a fixed defined amount.
Charge B was handed down due to insufficient anonymity on SkillOnNet’s whistleblower scheme, with reporting only possibly by email. Section 35 of the Money Laundering Act states employees must be able to report violations of money laundering legislation. This can be done anonymously and through independent channels.
What punishment could SkillOnNet receive?
Spillemyndigheden has increased its effort to clamp down on money laundering in recent times. In July 2022, it started an AML crackdown in line with the ministry of justice’s new strategy.
In 2023, operator Tipwin was fined DKK100,000 ($14,500/€13,400/£11,500) for breaches of anti-money laundering (MLA) regulations. That was over a year after violations were initially identified.
Tipwin’s offences included gross and negligent violations of rules on risk assessments, policies and internal controls, similar to SkillOnNet’s infringements. Alongside Tipwin, other operators to have faced injunctions for AML reasons in recent times include Casumo, Casino Copenhagen and Bet365.
Money laundering isn’t the only area that Spillemyndigheden is honing in on, with illegal gambling also in its sights.
In a new report, Spillemyndigheden set out details of how it countered illegal activities during 2023. This covers both the online and land-based sectors in Denmark.
The regulator said Stake.com was the highest profile operator blocked last year. This was after it obtained a court order to block 49 websites deemed to be operating illegally in Denmark.
SkillOnNet’s AML failings in Great Britain
SkillOnNet’s troubles in Denmark come after it was ordered to pay £305,150 (€350,351/$378,299) by Great Britain’s Gambling Commission. This was over a number of AML and social responsibility failings.
The company was ordered to make the payment in lieu of a financial penalty having reached a settlement agreement. The funds are to be directed to socially responsible causes.
A Commission-led regulatory review of SkillOnNet for the period between January 2021 and December 2022 found the operator failed to comply with several Licence Conditions and Codes of Practice (LCCP).
Much like its infringements in Denmark, SkillOnNet’s core failures in Great Britain included insufficient policies, procedures and controls to comply with AML responsibilities. Deficiencies in its responsible gambling policies, procedures, controls and practices were also highlighted.
Original article: https://igamingbusiness.com/legal-compliance/regulation/skillonnet-facing-punitive-measures-denmark-aml-failings/
