Videoslots, a Malta-based gambling group, has been hit with a penalty fine of SEK9m by the Swedish gaming authority, Spelinspektionen, for violating anti-money laundering and terrorism financing laws. The group was found to have failed to meet customer knowledge requirements and its shortcomings were deemed both serious and systematic.
The investigation conducted by Spelinspektionen uncovered Videoslots’ AML protocol failures with 10 of its largest customers between 2019 and 2021. These customers were randomly selected based on their deposit and total transaction amounts. One customer in particular deposited over SEK5m despite having an income of just SEK57,000 in 2018, raising red flags that were not adequately addressed by Videoslots.
Videoslots defended its position, stating that the audited customers did not represent the high level of compliance it strives to achieve and that the purpose of AML rules is mainly to report suspicious activity to financial intelligence units. However, Spelinspektionen argued that the company itself has a duty to detect and deter suspicious activity.
The regulator ruled that Videoslots was in breach of various sections of the Money Laundering Act, including a failure to take prompt enhanced customer awareness measures and failure to document and preserve data regarding these measures.
While Videoslots committed to improvements in the wake of the investigation, Spelinspektionen noted that the company did not actively facilitate the investigation, despite being cooperative. Furthermore, the regulator expressed concerns about Videoslots’ proactive and risk-based approach to ensuring customer knowledge is sufficient to assess and counter the risk of money laundering and terrorism financing.
Despite the penalty fine, Videoslots will not lose its license in Sweden. The company is also licensed in Malta, Great Britain, Denmark, Italy, and Spain. Spelinspektionen’s decision emphasized the inadequacy of Videoslots’ customer knowledge regarding the audited customers and their transactions, leading to a failure to maintain business relationships or perform individual transactions for these customers.