October turned out to be a month of mixed emotions for Swedish gambling group LeoVegas AB as far as its operations in Denmark are concerned. The month started with a renewal of its online gambling licenses, only to finish with a regulatory reprimand.
AML and Reporting Failures
Danish gambling regulator Spillemyndigheden released a statement on its website revealing it reprimanded Swedish gambling operator LeoVegas for violation of rules related to customer due diligence procedures.
The gambling authority cited violations of provisions in the Money Laundering Act for allowing customers to deposit funds without subsequent validation of the source of funding to make sure the funds were not proceeds of crime.
Spillemyndigheden also revealed that LeoVegas failed to comply with its obligations to report suspicious cases of money laundering to the Anti-Money Laundering Secretariat within a reasonable time frame.
The reprimand was issued by the regulatory authority following a probe into the operator in which Spillemyndigheden randomly chose 20 of the major players at LeoVegas and in five of these cases, between 2017 and 2019, the gambling authority found the operator in breach of AML laws.
The players in focus deposited each between DKK 1.2 million ($192,000) and DKK1.6 million ($256,000) in the space of between six and 46 months but did not validate whether the funds for their deposits came from criminal sources.
In four of these cases, LeoVegas failed to adhere to its reporting obligations and informed the Anti-Money Laundering Secretariat between 10 months and 22 months later and was adjudged by Spillemyndigheden to have acted too late. Further, the first report was submitted only after the regulator chose the four transactions in its random sample of players, the regulator outlined.
AML Obligations Are Fundamental
Spillemyndigheden reiterated its stance that customer due diligence procedures and operators’ obligations to investigate sources of funding, as well as to report suspicious cases of money laundering, are fundamental in the Money Laundering Act, stating that any violations would be considered as a starting point for injunctions or reprimands.
Since LeoVegas had introduced new due diligence procedures effective January 1, 2020 that would allow for investigations in similar future cases to be carried out at a much earlier stage, as well as deliver timely submission of reports to the Secretariat, the gambling authority decided to just reprimand the operator this time.
Earlier this month, Spillemyndigheden renewed LeoVegas’ licenses to allow the operator to continue to offer online casino games and sports betting to Danish residents until 2026.