The Swedish Gambling Authority has provided LeoVegas with a notice and a penalty charge of SEK 2 million (£171,734/€197,497) for what the regulator terms “shortcomings in the work against money laundering and terrorist financing.”
During the first year of the market’s regulation, the company claims it was found to have violated some consumer due diligence procedures with respect to its Swedish customers.
The SGA claims that the sanction’s size is determined by the Money Laundering Act, as opposed to the Gambling Act, which is used in most of its other supervisory decisions. According to the Act, the maximum fine for this form of violation is €1 million.
High demands on gaming companies
The Swedish supervisory authority clarified why the decision was made: “The Money Laundering Act places high demands on gaming companies that are licenced under the Gaming Act.
“Gambling companies must counteract the use of the business to launder money or finance terrorism. The law is based on a risk-based approach, which means that licensees must take measures that are in proportion to the risks to which they are exposed.
“The licensee must identify its customers and find out enough information to be able to assess and manage the risks associated with the customer. In the event of a high risk, more comprehensive measures for customer awareness must be taken. LeoVegas has not operated in such a risk-based manner as required by law.
“LeoVegas has failed in its work on customer knowledge and risk classification of customers, and it has failed in the documentation for what measures have been taken.
“This has entailed significant risks that LeoVegas may have been used for money laundering and terrorist financing, which must be considered serious. The company therefore receives a warning and a penalty fee of SEK 2m.”
Review of company routines
In response to the sanction, LeoVegas, which runs the gogocasino.com and leovegas.com URLs in Sweden, declared its intention to appeal the ruling, claiming that “the Swedish Gambling Authority only reviewed the company’s routines in 2019,” according to the lawsuit.
The online gaming company went on to say: “LeoVegas is continually developing its policies to ensure compliance, and had already, before today’s decision, changed and updated its customer due diligence routines.
“LeoVegas intends to appeal today’s decision in order to allow a court to review the matter and give the entire industry further guidance on how the current regulation is to be interpreted.”