A well-known online gambling site, SkillOnNet, has faced repercussions in Denmark for neglecting to adhere to anti-money laundering regulations. The Danish gaming authority, Spillemyndigheden, has issued a series of warnings and filed formal complaints against SkillOnNet for violating these laws.
The Danish regulatory body decided to take action after examining materials provided by SkillOnNet, which the company believed satisfied anti-money laundering (AML) standards. However, the regulator deemed these materials insufficient and issued three warnings. These warnings address violations related to maintaining accurate records of completed checks, internal control procedures, and risk assessments.
Spillemyndigheden also accused SkillOnNet of breaking rules concerning business processes and employee reporting programs.
The warnings demand immediate action from SkillOnNet. The company must submit revised risk assessments and re-evaluate its internal control procedures within a two-month period. Furthermore, SkillOnNet must provide documentation demonstrating that its internal controls have been thoroughly scrutinized.
The Danish Gaming Authority declared: “Comprehensive risk evaluations, operational procedures, and informant systems are the foundation of anti-money laundering legislation, and thus the severity of the breaches resulted in three prohibitions and two legal actions.”
SkillOnNet, in a statement provided to iGB, stated: “Skill On Net Ltd upholds stringent anti-money laundering standards in Denmark, as it does in all its operational regions. We are taken aback by the Danish Gambling Authority’s (DGA) decision to issue three directives to enhance internal anti-money laundering processes and the level of detail in documentation outlining anti-money laundering measures.
“These directives are solely about more detail in the description of procedures, and SkillOnNet suspects there may have been a misinterpretation. We have contacted the DGA to fully comprehend the improvements they believe need to be implemented.”
A closer examination of SkillOnNet’s transgressions in Denmark
The initial prohibition was issued due to SkillOnNet’s insufficient risk evaluation, which was determined to not address the risks of the company’s business model, including payment solutions and products, thereby breaching the anti-money laundering law’s Article 7 obligation concerning risk evaluation.
Prohibition B pertains to Article 8 of the anti-money laundering law. It concerns SkillOnNet’s written business procedures failing to convey how, when, and by whom checks are conducted to ensure the implementation of internal controls.
The directive was given because SkillOnNet couldn’t furnish adequate documentation for their audits.
The initial charge stemmed from their faulty procedure for establishing customer connections prior to October 16, 2023. They didn’t properly familiarize themselves with their clientele, contravening Section 10 of the Anti-Money Laundering Act.
The second charge arose because SkillOnNet neglected to screen for politically exposed individuals or closely associated individuals or business associates who didn’t pay more than a set amount, as mandated by Section 18 of the Anti-Money Laundering Act.
The third charge was levied because SkillOnNet’s whistleblower program wasn’t sufficiently anonymous. Reporting was only possible via email, which contravenes Section 35 of the Anti-Money Laundering Act. Workers need to be able to report violations anonymously and through independent channels.
What sort of penalty could SkillOnNet encounter?
Spillemyndigheden has been rigorously enforcing anti-money laundering measures in recent years. In July 2022, they launched an anti-money laundering campaign, following the Ministry of Justice’s most recent strategy.
In 2023, Tipwin was fined 100,000 Danish kroner ($14,500/€13,400/£11,500) for violating anti-money laundering rules.
Tipwin has finally been penalized, over a year after its infractions were initially detected.
Tipwin’s infractions encompassed serious and careless breaches of risk assessments, rules, and internal control regulations, comparable to SkillOnNet’s violations. Besides Tipwin, other operators recently facing prohibitions for anti-money laundering reasons include Casumo, Casino Copenhagen, and Bet365.
Money laundering is not the sole area of focus for Spillemyndigheden, illicit gambling is also in its sights.
In a fresh report, Spillemyndigheden details how it cracked down on illicit activities in 2023. This encompassed both the online and land-based sectors in Denmark.
The regulator stated that Stake.com was the most prominent operator to be blocked last year. This occurred after obtaining a court order to block 49 websites believed to be operating illegally in Denmark.
SkillOnNet’s anti-money laundering shortcomings in the UK
SkillOnNet’s difficulties in Denmark came after it was ordered to pay £305,150 (€350,351/$378,299) by the UK Gambling Commission. This was due to a series of anti-money laundering and social responsibility failures.
The company was ordered to pay the sum in lieu of a penalty, as both parties reached a settlement agreement. The funds will be used for social responsibility causes.
The Commission’s regulatory review of SkillOnNet between January 2021 and December 2022 discovered that the operator failed to comply with several licensing conditions and codes of practice (LCCP).
Similar to the difficulties encountered in Denmark, SkillOnNet’s primary challenges in the UK stem from inadequate regulations, systems, and safeguards to prevent money laundering. They also lacked robust policies, procedures, and practices to ensure responsible gambling.
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