Swedish gambling regulator strengthens AML guidelines

The guidelines have been revised with the Swedish Financial Intelligence Unit.
Sweden.- The Swedish gambling regulator Spelinspektionen has made changes to its guidelines on money laundering and terrorist financing for online gaming operators. Changes include tighter due diligence in the customer onboarding process and requirements beyond the standard know-your-customer (KYC) checks.
Online gaming operators must verify customers using a valid identification document, such as a passport, SIS National ID card, driving licence or tax ID, and must carry out comprehensive background checks, which must include collecting data on the purpose and nature of each player’s gambling.
Proof of the source of funds must be requested for bigger deposits, and operators must ascertain whether a customer is a Politically Exposed Person (PEP). The regulator expects enhanced due diligence (EDD) for high-risk customers, including verification of income sources and bank statements.
Spelinspektionen said operators should conduct routine internal controls to make sure that checks are applied correctly by staff and should keep records in order to provide oversight. Operators should keep customer identification data, transaction records, and risk assessments for five years, ensuring that the documentation is dated and easily retrievable if needed for an audit.
The regulator said internal controls should focus on customer background checks, risk management, account monitoring and staff training. The latter is seen as a key factor, with the regulator stressing that frontline employees should be able to identify potential threats.
Spelinspektionen’s director general, Camilla Rosenberg, said: “The gambling industry is a risk area for money laundering, and we have seen a need for further clarification and guidance in this area. We have therefore revised our guidance and are also conducting a new risk assessment.”
Now in their fifth edition, the guidelines include input from Sweden’s Financial Intelligence Unit (FIPO) amid concerns that technological advances and economic growth present an increased risk of money laundering through high stakes online gaming. They are also designed to align with the EU’s introduction of an Anti-Money Laundering Authority (AMLA) and new regulations on money laundering. Spelinspektionen noted that it continues to adopt a risk-based approach and that operators must take proportional measures.
Meanwhile, Spelinspektionen has submitted a new study to the Swedish government raising concerns about underage gambling and a possible link between loot boxes and risky gambling behaviour. Spelinspektionen’s report cites figures showing that young adults who used loot boxes as minors were more likely to go on develop gambling problems
The report appears to show a rise in underage gambling and links this with the influence of loot boxes in video games. Among the respondents who bought their first loot box before the age of 18, 62 per cent also gambled online for money as a minor. Meanwhile, 87 per cent of respondents now aged 18 to 24 and who bought loot boxes before they turned 15 displayed signs of risky gambling as adults.