French financial sanctions authority fines sports betting operator over AML failures

The French National Sanctions Committee (CNS) has imposed fines and suspended bans on a French-licensed online sports betting operator and two of its senior executives.

The July decision was for failing to comply with European Union and French asset-freezing rules intended to prevent money laundering and terrorist financing.

The case was originally put to the CNS by the French regulator (ANJ) last year, it was then upheld in July of this year. The ANJ published the decision this week.

Sanctions imposed

The CNS anonymised individual identities in the published decision to prevent disproportionate prejudice, in accordance with procedural rules.

GU, the online betting operator, received a two-month suspension of online betting operations as well as a €20,000 fine.

A two-month ban on managing activities in the online betting sector and a €20,000 fine were enforced on Monsieur AB, the former CEO and head of the parent company providing staff. A similar ban and €5,000 fine was placed on Madame BG, the operator’s compliance officer.

No sanctions were imposed on the legal officer nor the owner and major shareholder. 

The sanctions related to an incident involving the operator, identified as “GU” in the CNS decision. According to the report, a player account was opened on 3 December 2023 for an individual listed on France’s national register of persons subject to an asset-freezing order. 

Despite automated system alerts triggered on the same day, the operator only confirmed the account 11 days later, on 14 December 2023.

The French gambling regulator (ANJ) notified GU and launched an administrative inquiry on 3 January 2024. GU closed the account on 4 January 2024.

Staying silent 

The CNS found GU deficient in two essential areas.

The first was that GU lacked effective systems and procedures to ensure prompt, effective application of asset-freezing obligations. 

The failure allowed the prohibited account to be opened despite system alerts, breaching articles L.562-4-1 and R.562-1 of the French monetary and financial code. The CNS described this duty as an “obligation of result” that requires operators to guarantee prohibited accounts are not created.

GU also neglected to inform the minister responsible for the economy about the asset-freezing incident and associated transactions. 

Notification was absent both on 3 December (when an alleged human error created a false positive) and on 4 January (after account closure, by which time uncertainty should have been resolved).

The CNS dismissed a separate alleged breach concerning acceptance or execution of transactions without verified identity or purpose due to insufficient evidence.

Extra scrutiny on enforcement

Online gambling operators in France are subject to stringent anti-money laundering and counter-terrorism financing regulations. This falls particularly under the monetary and financial code (articles L.561-1 et seq) and the specific asset-freeze regime (articles L.562-4 et seq). 

In addition, earlier this year ANJ issued a practical guide aimed at facilitating licensed online gambling operators to better identify, document and respond to various types of player fraud. 

The guide clarified expectations around compliance with existing anti-fraud and anti-money laundering regulations without introducing new legal obligations. 

Operators were encouraged to take several practical steps, including enhancing terms and conditions, maintaining robust evidence and raising technical standards.