EU online gambling operators salute the European Commission’s updated rules (see link) on anti-money laundering. The new rules, which we hope will bring a greater level of consistency between national rules, confirm that online gambling is a clear cross-border economic activity covered by a growing number of EU-harmonised legislation.
The European Commission’s new AML proposal seeks to protect the financial sector but also other sectors such as gambling from being misused for money laundering purposes. The new rules update the 2005 directive, which only included in its scope casino activities. The new rules cover for the first time all types of gambling activities, in particular online gambling, and will be subject to a risk-based approach (RBA).
The EU-licensed online gambling industry has already been applying standard AML provisions as part of their national licensing regime(s) for a number of years despite the fact that the risks associated with money laundering in regulated online gambling are very limited.(1)
Sigrid Ligné, Secretary General of the EGBA, said: “Today’s changes will improve the legal certainty of the sector by being incorporated into another piece of EU-harmonised legislation. They will also improve market access for regulated operators as some Member States today still use the fight against money laundering as a justification to prohibit online gambling services.”
With the proposed changes, the EGBA hopes that Member States will implement the provisions of the directive in a consistent way by allowing online operators to continue to evaluate money laundering risks on a risk-based approach. The traceability and transparency of internet transactions mean that Member States should leave it to operators to decide, based on the risk factor, when to apply simple or enhanced due diligence. This is the best way to identify potential fraudsters and ensure consumers remain with regulated operators.
EGBA hopes as well that the new rules on anti-money laundering practices for online gambling will lead to harmonizing certain aspects of how customers should be identified. Multi–licensed online gambling operators have to comply with an increasing number of fragmented and inconsistent national regulations. This is particularly true in relation to know your customer (KYC) requirements which, in most countries, are not adapted to the online environment.