The gaming industry is regulated by gaming regulators as it is at risk of financial crime. Gaming operators must not be vulnerable to money laundering and terrorist financing threats. Therefore, gaming operators have to meet international and local AML obligations. AML regulations for the gaming industry vary from country to country. In this article, we will examine general AML regulations covering the gaming, igaming and gambling industries.
With the development of technology, the gaming industry has become online. The online gaming (Igaming) industry has grown hugely in recent years. With the globalization brought by technology, they started to have customer portfolios covering the whole world. This globalization also increased the risks of financial crime in the gaming industry. The criminals took advantage of the lack of AML control in the gaming industry and committed money laundering and terrorist financing crimes through gaming operators. The most common method used by criminals is to launder money by making low-rate betting transactions through betting companies.
Risk-Based Approach in the Gaming Industry
As in every industry, a risk-based approach is very important and necessary in the gaming industry. In order for an AML control program to achieve its purpose, it is very important to identify risks and take precautions against risks. As part of the risk-based approach, game operators must implement risk assessment by implementing AML controls to new customers throughout the customer engagement process. Know Your Customer and Customer Due Diligence procedures describe the controls that must be implemented during the customer onboarding process.
CDD and KYC Procedures for Gaming Operators
Operators in the gaming industry are required to perform customer ID identification control and risk assessment during customer account opening. Operators must collect and store customer information according to KYC procedures. Operators have to scan their customers in sanction, PEP and adverse media data when making a risk assessment. According to the regulators, the people on these lists are high-risk customers and operators have to detect matching customers in this data.
Sanction Scanner database contains sanction, PEP and adverse media data of more than two hundred countries. Our product, AML Screening Software, enables gaming operators to scan their customers in global comprehensive and real-time AML data. Operators in the gaming industry can meet their AML obligations within seconds with AML Screening Software.
AML Fines to the Gaming Industry
With the increase in financial crime risks in the gaming industry, the audits implemented by regulators have also increased. Regulators impose fines and administrative penalties on organizations that do not meet AML obligations. According to the announced data, AML regulators fined 16 million pounds for gaming and gambling operators who did not meet their AML obligations in 2019. When we look at the data in 2020, even though we are in June, the AML penalties given to the operators have exceeded 40 million pounds. The fact that the fines are so high shows how important it is for gaming operators to ensure AML compliance.