Prevention of money laundering

On this page, you will find the things you, as a gambling operator, must be aware of to comply with the anti-money laundering 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 Gambling Authority is a  supervising authority for gambling operators obliged by the Danish AML  Act and must ensure the gambling operators’ compliance with the Act and other relevant national and international legislation

Obliged entities 

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 casino
  • Land-based casino
  • Betting

Retailers in land-based betting

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.

Depending on the business model of the operators the retailer and all personnel 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.

Partially exempted gambling products

The Minister for Taxation has partially exempted the following gambling products from the AML Act’s requirements:

  • Lotteries
  • 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

Please note

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 must have sufficient policies, procedures, and controls, which describe the operators’ procedures in relation to the identification of suspicious behavior and transactions.

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

The procedures must be operational and directly workable to the employees.

The risk-based approach

The gambling operator must base its procedures on the risks, which are applicable for its particular business model. This means that the gambling operator must assess all parts of the offer of gambling in relation to the inherent risk of being utilized for money laundering.
The risk assessment is a prerequisite if the gambling operator’s procedures are to be deemed sufficient.

Employee instruction

The management and (new) employees of a gambling operator must be instructed in the gambling operator’s procedures, including the risk assessment to the extent that the procedure or parts thereof is relevant for their job function, e.g. customer support or transaction analyst. The gambling operator is required to ensure that management and employees actually participate in the instruction and obtain an adequate level of knowledge relating to the job functions that must be performed.

Guidance

The Danish Gambling Authority's guidance on preventive measures against money laundering of criminal proceeds and financing of terrorism

Legislation

Consolidation Act No. 930
Of 11 Sep 2019

On preventive measures against money laundering and financing of terrorism (Act on Money Laundering)

Only available in Danish

Executive Order no. 727
Of 09 Jun 2017

On partial exception of certain games from the Act on Money Laundering

Only available in Danish

Executive Order no. 1704
Of 20 Dec 2017

On reporting and publication of information about domestic politically exposed persons

Executive Order no. 1403
Of 01 Dec 2017

On submission of information etc. to the State Prosecutor for Serious Economic and International Crime 

Decree no. 812
Of 16 Aug 2019

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