Prevention of money laundering
The Danish Gambling Authority is the supervisory authority of gambling operators covered by the Anti Money Laundering Act (AML Act). The Danish Gambling Authority monitors that gambling operators comply with the Act and other relevant national and international legislation.
How is money laundering and terrorism financing defined?
Money laundering entails that a person:
- Receives or obtains on part of themselves or others a share in the financial proceeds of a criminal act
- Hides, stores, transports, helps to transfer or in another manner assists in securing the financial proceeds of a criminal act
Terrorism financing entails that a person:
- Directly or indirectly contributes with financial support to, raise or collect funds to or make financial services available for persons, groups, or organisations that commit or have intentions ofto committing acts of terror
The Danish AML Act covers persons and legal entities that commercially provide gambling in Denmark with a licence. The Act also covers persons and legal entities that are established in Denmark and commercially provide gambling in other countries.
The Act covers all gambling products as a rule, but the Minister for Taxation can exempt the offer of particular gambling products from the legislative requirements partly or entirely if the gambling product is assessed to constitute a low risk of being exploited in connection with money laundering. That possibility has been utilized, so that the Act covers gambling operators that offer:
- Online betting
- Land-based betting
- Online casino
- Land-based casino
Partially exempted gambling products
The Minister for Taxation has partially exempted the following gambling products from the AML Act’s requirements:
- Class lotteries
- Charity lotteries
- Local pool betting
- Gaming machines in arcades and restaurants
- Fantasy sports (not daily)
- Competitions where participation requires the sending of text messages or similar
- Gambling in accordance with sections 9 to 15 of the executive order on public amusements
- Online bingo offered through television
that even though the gambling products are exempted from the AML Act’s requirements to a large extent, the gambling operator must comply with:
- Requirements for reporting to the Danish FIU
- Requirements in relation to transactions in relation to suspicions
- Requirements in relation to confidentiality
What must a gambling operator do?
Gambling operators play, like other obliged entities according to the Act, an important role in preventing money laundering and terrorism financing since they are prerequisite for ensuring that the risk of detection is real.
The AML Act requires that the gambling operator meet several obligations. They are specified, in short, in the following.
The gambling operator must identify and assess the risk of being abused for purposes of money laundering or financing of terrorism. The gambling operator must base their procedures on the risks that apply to their specific business model. This means that the gambling operator must prepare a risk assessment of all parts of their provision of gambling activities in relation to money laundering. The risk assessment is a prerequisite for the Danish Gambling Authority to consider the gambling operator's procedures sufficient.
The gambling operator must have sufficient policies, procedures, and controls, which describe the operator's procedures in relation to the identification of suspicious behavior and transactions.The procedures must be operational and thereby be directly useful to relevant employees.
The procedure must at a minimum manage:
- Risk management
- KYC procedures
- Investigation, recording of findings, and reporting requirements
- Storing of records, transactions etc.
- Screening of employees and efficient controls for the prevention of money laundering and terrorism financing
- Data protection in relation to money laundering
The gambling operator must ensure that the management and (new) employees are instructed in the requirements of the AML Act. The gambling operator must ensure that the management and employees actually participate in the instruction and that they obtain sufficient knowledge in relation to their tasks. The instruction must be repeated and updated regularly, for example in instances where the risk assessment and procedures are updated.
The gambling operator must know their customers and the customer's purpose with the business relation. This is called KYC procedures. It is important to ensure that the customer's purpose is not money laundering. The gambling operator must implement the procedures when the player is registered as a customer. For example when creating an account, issuing a loyalty card, month pass or annual pass. In addition to this, they must be implemented at other times as well, among other things, when the customer's relevant circumstances change. In a situation, where games are entered without a regular customer relationship, the procedures must be implemented when the stake or payment of winnings are of at least 2,000 euros, or when there is a suspicion about money laundering or financing of terrorism.
The gambling operator must investigate the background for and the purpose of all transaction that are:
- Unusually large
- Made in an unusual pattern
- Does not have an obvious financial or legal purpose
In addition to this, it may be relevant to expand the supervision of the customer to determine whether the transactions are suspicious.
The gambling operator must record information about the customer, transaction or the activity and the conclusion of the investigation. The obligation to record findings covers both cases that lead to a notification to the State Prosecutor for Serious Economic and International Crime and cases that do not result in a notification.
The gambling operator must keep records of the information gathered in relation to
- KYC procedures
- Documentation for and registrations of transactions made as a part of a business relation or a single transaction
- Documents and registrations of completed investigations
The gambling operator must notify the Anti Money Laundering Secretariat at the State Prosecutor for Serious Economic and International Crime if the gambling operator becomes aware or suspicious of or have reason to suspect that (a)
- financial means
has or have had relation to money laundering or financing of terrorism. The notification must take place immediately and digitally. The Anti Money Laundering Secretariat will assess whether the notification must be further investigated.
If the transaction has not already been completed, the gambling operator must refrain from completing the transaction until a notification to the Anti Money Laundering Secretariat has been made. If the gambling operator cannot refrain from completing the transaction or if the gambling operator assesses that an ommission will harm the investigation, the notification must be made immediately after the completion.
For more information about the gambling operator's obligations, please read the Danish Gambling Authority's guidance on preventive measures against money laundering of criminal proceeds and financing of terrorism.
Note that if e.g. a kiosk or super market provide betting products on behalf of a gambling operator, the retailer is not an obliged entity according to the Act. This means, in practical terms, that it is the gambling operator, who can be subject to penalties if the retailer does not perform the required actions. The operator is obligated to instruct retailers about the required actions.
Depending on the business model of the operators the retailer and all staff who is selling betting products must e.g. know:
- When KYC must be performed
- How KYC must be performed, including relevant levels
- What is considered a suspicious transaction or behavior
- What constitutes a connected transactions
- How to pass on KYC documentation and basis for suspicion to the obliged entity
- Proper handling of personal data e.g. in connection with KYC
The gambling operator must make sure that the retailer and the employees thereof are capable of performing the duty of preventing money laundering in an sufficient manner. Therefore, the gambling operator is obligated to continuously ensure that the retailer and the employees thereof e.g. perform KYC and pass on information about suspicions relating to money laundering to the gambling operator.
If you want to know more about the Danish Gambling Authority's work with preventing money laundering and financing of terrorism, you may find it here.
On preventive measures against money laundering and financing of terrorism (Anti-Money Laundering Act)
Only available in Danish
On partial exception of certain games from the Act on Money Laundering
Only available in Danish
On reporting and publication of information about domestic politically exposed persons
On submission of information etc. to the State Prosecutor for Serious Economic and International Crime
On the entry into force of the Act on preventive measures against money laundering and financing of terrorism (the Anti-Money Laundring Act) for Greenland
Only available in Danish
On reporting of discrepancies in information on real owners
Only available in Danish
Want to know more?
Below you will find FATF's guides: