Trans-Atlantic Fight Against Money Laundering Goes On

Anti money laundering regulations toughen in different countries, and there’s support from legal gambling operators.

As the fight against money laundering goes global. Various nations around the world are having to update their legislation and regulations to try and keep pace with the hydra-like facets of online criminal activity. This effort is shared between agencies and authorities, regulatory bodies and indeed the industries that legitimately use the internet every day.

The authorized online gambling industry faces a huge uphill struggle against the myriad of illegal, unlicensed sites that provide gambling opportunities without proper regulation and therefore are subject to abuse by criminals seeking to turn the proceeds of illegal activity into legitimate financial assets.

AML (anti money laundering) laws and regulations vary widely across the world and this variation is often used by criminals to circumvent any consequences of their activities. When one nation cracks down they simply up-sticks and move to another, and sometimes then only virtually.

The ability of these sites to hide their locations using virtual private networks makes a uniformity of legislation and regulation across international borders a matter of priority to safeguard the legitimate online gambling industry. Big players such as Bet365 are assisting authorities to shape these revisions of the laws in order to protect both operators and their customers from Chinese money laundering.

Canada Brings Home The Bacon

Anti money laundering laws toughen around the world

• New regulations in Canada and Spain

• Authorities are helped by operators under Canadian gambling laws

• A more global response to money laundering is still needed

Canadian gambling laws have been very successful in maintaining the country’s share of global gambling market and the recent federal budget of 2014 made inroads against criminals and terrorists who seek to use the online gambling industry as a method of money laundering.

The Proceeds Of Crime and Terrorist Financing Act is being broadened to apply to online casinos in a move widely seen as an effort to comply with international standards and minimize compliance burdens. These amendments to the act were introduced by Canada’s Minister of Finance and are expected to pass into law without opposition.

Many of the changes centre on the imposition of reporting requirements on online casinos and their parent companies and the inclusion of all persons that deal in virtual currencies like Bitcoin. These virtual currencies make it all but impossible for authorities to follow the money trail.

In order to give the authorities the flexibility to meet an ever changing threat the Minister of Finance can issue mandatory directives pertaining to any transaction that originates from or is bound to any foreign state or entity. Most often this would be based on a Suspicious Activity Report from the operator who are legally required to report them.

Spain In The Neck

Meanwhile on the other side of the Atlantic the Spanish are also updating their AML laws in an effort to combat the same problem but their approach has been slightly different. New regulations covering online casinos in Spain require operators to not only file SARs when necessary but also to identify winners.

The proof of identity provision is only applicable on wins over EUR 2,500 ($3,400) but requires players to provide legitimate identification of themselves before gaining their winnings. This is combined with a more stringent reporting regime in which repetitive prize payments are to be closely monitored may make Spain a front runner in the fight against international money laundering.

One of the other innovations the law creates is the requirement for entities within the legitimate online gambling business to appoint a Money Laundering Reporting Officer (or MLRO) to better facilitate cooperation between the operators and the authorities. This may be expanded to include special examination record keeping to allow closer monitoring over time.

The new regulatory framework also makes it clear that transactions may well be considered jointly rather than as separate instances so on a case by case basis criminals will be unable to hide their activities simply by parceling it up in to smaller transactions. These may well be monitored by automated software systems that would provide live alerts.

International Crime Needs Global Response

Money laundering facilitates other crime from corruption to terrorism, from illegal gambling to online fraud, and every nation is now required to face up to the responsibilities they have to safeguard their citizens online. This is especially true of the online gambling industry that deals with such large fiscal amounts every day.

The various approaches taken by different nations are often the result of particular legal presets or pre-existing legislative work that is either replaced or amended as the threat adapts to circumstance. Spain’s identity requirements may well help cut money laundering, or could create a larger market for fraudulent identification documents.

Likewise Canada’s approach might seem on the face of it to be an effective attempt to limit the danger of their online gambling industry being used in a criminal manner, however the law doesn’t yet apply to off-shore service providers (a large percentage of the online gambling market in Canada).

As time goes on more and more governments across the world are waking up to the threat that illegal gambling sites pose to both legitimate, properly regulated, gambling sites such as Bet365 who play by the rules, and the nation as a whole. Money laundering might sound old hat but it’s what pays for the terrorists weapons in this modern world of ours.

Stamping out money laundering is now a priority across the industry.

Read more about how the gambling industry is fighting money laundering.