Swedish Gambling Authority risk assessment claims “high” chance of money laundering in online gambling
Regulator cites virtual currencies and greater player anonymity as increasing instances of fraud via gambling firms
The Swedish Gambling Authority (SGA) has released a new risk assessment document which claims there is a significantly “high” risk of money laundering coming through online casino and sports betting sites.
The assessment is the first conducted by the SGA and aims to provide comprehensive information on “threats, vulnerabilities and risks” occurring in the Swedish market.
It also provides a basis for future regulatory changes as well as acting as a supporting document in the SGA’s ongoing approach.
The SGA has assessed each vertical based on the likelihood of money laundering, and rated both online casino gaming and sports betting, as well as land-based casino and sports betting as being high risk.
The report claims that the lack of personal meetings together with the complex and large amounts of financial transactions going through operator accounts increase the risk that money can be laundered.
It claims that players can deposit fraudulent funds with online operators, and withdraw them without placing bets, a practice which is known as integration.
“Consumption of crime profits is very likely to occur betting online. The amounts are in some cases very large. Since gambling can be financed through criminal profits, there is a need to be observant about the player’s financial background,” the SGA states in its report.
“Exploiting identity documents can be used to create one or more gaming accounts which are then used to implement fraud, money laundering or terrorist financing. Identity fraud can thus pose a high risk when starting a new customer relationship with a gaming operator,” the report explains.
In addition, the SGA risk assessment claims that use of electronic money, digital and virtual currencies are also increasing the anonymity of customers, making it more likely that these mediums will be used by fraudsters.
The assessment claims that online games have a higher risk of fraud due to the possibility of higher stakes, winnings and higher turnover of players.
The SGA has said that Swedish net sales (players’ bets minus winnings paid) on the regulated gaming market amounted to just under SEK25bn (£2bn) in 2019.