Danish regulator issues further warning to Unibet over AML breaches

Following an investigation into Unibet’s activities, Spillemyndigheden said that it identified a series of breaches of Denmark’s Money Laundering Act.

These violations, the regulator said, included that Unibet had not adequately risk-assessed its customer types and game types, which it said opened up the brand to potential misuse for money laundering purposes.

Spillemyndigheden said that until 25 January this year, Unibet did not have sufficient written business procedures for the ongoing monitoring of existing customer relationships, thus violating the rules of business procedures in Denmark.

Unibet was also found not to have in place sufficient business procedures to obtain and assess documentation in connection with suspected money laundering and to mitigate existing risks through certain payment methods.

Meanwhile, Unibet was issued a further warning after Spillemyndigheden found that, until 22 April last year, it had “deficient business practices” for dealing with politically exposed individuals and their close business partners.

Another failing was identified in relation to customer due diligence procedures, with the regulator saying that, following a random inspection of 20 major customers at Unibet, the operator failed to carry out sufficient customer due diligence in five cases.

Spillemyndigheden said in three of these five cases, Unibet neglected its duty to investigate suspicious transactions, while in one case, Unibet failed to notify the Money Laundering Secretariat about its suspicion or reasonable cause of suspicion of money laundering.

The regulator also identified violations of the Money Laundering Act’s rules on customer knowledge procedures, duty of investigation and duty of notification, in connection with an inspection carried out in response to a citizen inquiry about major games.

A warning was issued after a young player was allowed to deposit more than DKK1.0m (£112,191/€134,418/$152,858) into their account in one year, without having “sufficient knowledge of whether the player’s funds originated from criminal matters”. 

Funds were deposited using six different deposit cards, of which at least one did not belong to the player. Spillemyndigheden said Unibet only tried to investigate the origin of the funds after the player was no longer active with the operator and also after the regulator asked Unibet to send money laundering notes on the player.

A further warning was also issued after Unibet failed to notify the Money Laundering Secretariat immediately on the case. The regulator said a notification was only made more than six months after Unibet established there was a suspicion of money laundering and after it had consulted Unibet about the case.

In addition to the warnings, Spillemyndigheden ordered Unibet to make changes to its risk assessment in order to include all of the flagged matters and concerns. Unibet was given a two-month deadline from 16 February to complete these updates.

Responding to the warnings, Kindred said in a statement issued to iGB: “As previously communicated, Unibet  ’Denmark’ Limited, which operates Kindred Group’s Danish business, has been reprimanded by the Danish gambling authority, regarding past failing related to AML.

“Since then, Unibet has, in collaboration with the regulator, updated its AML framework accordingly and will provide the regulator with an updated risk assessment.

“Kindred Group have the ambition to demonstrate the highest quality and standards in the industry and we are pleased to see that the regulator have now acknowledged that the breaches no longer exists.

“Kindred has corresponded with the regulator in the matter in an open, transparent and productive manner throughout the process.

“We will continue with the collaboration and do everything necessary to further strengthen our control procedures maintaining our ambitions on offering high consumer safety and AML security.”

The announcement comes after Spillemyndigheden in December last year issued a warning to Unibet over breaches of money laundering regulations. This was related to an occasion where a Unibet customer was allowed to deposit DKK1.4m between December 2016 and December 2018, without Unibet confirming these funds did not originate from criminal activity.

At the time, Kindred told iGB that it had updated its policy and procedures over the past year to ensure “further improvements” to its AML framework. 

“We are taking necessary precautions to ensure we remain compliant with AML regulations and maintain our high standards on consumer protection,” Kindred said.

This week, the Norwegian Gambling Authority ordered Kindred to stop illegally offering gambling in the country, threatening a fine of NOK1.2m per day if its activity continues.

The Authority pledged to continue the fines, if necessary, until the amount meets Kindred’s annual gross profit from the country, which it has estimated to be NOK437m.