888 Warned over AML Failings

Spillemyndigheden, the Danish gambling regulator has ordered 888 to improve anti-money laundering processes based on the national Money Laundering Act. The ruling came after the online gaming operator’s subsidiary in the country was found to have fallen short of the legislation.

People sat at a casino table with two cards in front of them.

Spillemyndigheden’s warning to 888 Denmark serves to better regulate the Danish gambling market, and to better protect consumers in the country. ©Drew Rae/Pexels

According to the regulator, 888 Denmark was in breach of section 25 of the Money Laundering Act on two separate occasions. The act states that companies must implement appropriate written rules to govern their approach to recording, record keeping, risk assessments and communications to employees. This legislation is in place to prevent money laundering and the funding of terrorism.

The first case was in relation to an obligation to probe exceptionally large patterns of transactions and activities that do not have a clear legal or demonstrable legal purpose. This is to establish whether there is a reason to suspect whether they have been linked to or are involved in money laundering.

Additionally, in relation to section 25, the regulator stated that 888 had failed to notify the State Attorney for Special Economic and International Crime whether a transaction or activities were possibly associated with money laundering.

As a result of this, the regulator said that 888 should have closed a player’s account at an earlier date, as well as informed the State Attorney for Special Economic and International Crime about the amounts of money involved and its failure to comply with verification requests.

In response to this, the regulator ordered 888 Denmark to amend any procedures relating to the issue. As a result, any potential money laundering act can be stopped earlier, and the State Attorney for Special Economic and International Crime can be notified of similar cases. Section 66 of the Money Laundering Act also gives the Spillemyndigheden the power to make such requests of operators.

Increase in igaming Operator’s Tax

Earlier in December, the Danish government announced that the amount of tax paid by licensed igaming operators in the country would be increased to 28% of gross gaming revenue. In doing so, the government aims to raise DKK150m (£17.1m/€20.1m/$22.3m) in tax revenue.

The tax hike will become effective from 2021 and will see the tax rate increased from 20% of gross gaming revenue. The current tax rate has been in place since the Danish regulated gambling market was opened in 2012.

The government has noted that for betting and gaming, the online tax was lower than that which is imposed on land-based casinos and gambling-machines. Casinos pay 45% gross gaming revenue tax and a further 30% tax on revenue over DKK4m. On the other hand, gaming machines are taxed at 41% of gross gaming revenue, in addition to 30% on any revenue above DKK4,000 for machines that are located in restaurants, and the same levy on revenue over DKK250,000 in gaming machine halls.

The increase in tax has been put in place in an attempt to better regulate the market and to provide additional funding for problem gambling treatment, according to the government.

This change is expected to generate and additional DKK20m in taxes from 2021, rising to DKK150m in the future.

The government in Denmark is run by the Social Democratic Party in a minority government and was elected in June 2019. This government had to secure backing from other left-leaning parties such as the Red-Green Alliance, the Socialist People’s Party and the Social Liberal Party in order to get this budget passed.

The central idea of the increase in taxes on gambling is to generate more revenue to fund healthcare, education and the welfare system in the country. Additionally, it is planned to create a Green Future Fund, worth DKK25bn, which will invest in environmentally friendly businesses and initiatives.

The hike came after operators in the country voluntarily introduced an improved code of conduct. This sets out a series of standards for advertising and player protection in Denmark. This code was introduced in July this year and was developed by the Danish Online Gaming Association, the slot machine operator Dansk Automat Brancheforening, and the casino operator groups Dansk Kasinoforening and Aarhus-based Royal Casino.

Since its regulation, the Danish market has been perceived as an example that should be followed by other regulatory jurisdictions. Recently, however, results have shown that the market has begun to decline. In the third quarter or 2019, for example, the revenue from gambling in Denmark fell to DKK1.61bn. Although this is marginal, it is believed to be as a result of falling contributions from sports betting and land-based gaming machines.

Spillemyndigheden’s New Marketing Campaign

At the start of December, the Danish regulator began a new campaign to promote its ‘StopSpillet’ gaming addiction program, encouraging people to seek help.

StopSpillet was launched in January and is a helpline that has taken almost 700 calls from consumers who suffer from a gambling addiction, or who know someone who is suffering from the problem.

The new campaign features three 30-second long video adverts that will run across national television, social media and streaming services. These have the aim of promoting how StopSpillet can help consumers in need.

The films each depict a different person. One shows a father, one a mother, and one a young footballer. Each of these are shown in different everyday situations, but they are all depicted as hiding their gambling habits from their family and friends. There is also a voiceover to inform viewers of their inner thoughts about their issues relating to gambling.

The regulator hopes that this will help to demonstrate how StopSpillet can help consumers and the campaign is running with the tagline of “if you can’t say it out loud you can tell us”.

The regulator is also trialing a new chat feature on the StopSpillet website that will allow consumers to chat with expert advisors online, quickly and easily.

In September, the regulator praised the success of the StopSpillet program, saying that 348 calls had been taken in the six months before the 30th of June 2019. This number has risen significantly since July, with a further 152 calls made in the period between the and the 11th of September.

Of the 500 calls made in the period, 46% were players and 39% were relatives of gamblers. An additional 5% were healthcare professionals and 10% called for advice on gambling.

The majority of callers were men, making up 85% of the phone calls. Women made up 15% but for relatives calling on behalf of gamblers, women dominated, making up 69% of callers.

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