EGBA AML Guidelines Target Lack Of Sector-Specific Rules

March 9, 2023
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The European Gaming and Betting Association (EGBA) has published its first pan-European online gambling anti-money laundering (AML) guidelines, as it seeks to address previously highlighted shortcomings.

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The European Gaming and Betting Association (EGBA) has published its first pan-European online gambling anti-money laundering (AML) guidelines, as it seeks to address previously highlighted shortcomings.

Several areas which require strong AML compliance are covered in the guidelines, such as terrorist financing, sector-specific guidance on customer and business risk assessments, customer due diligence processes, suspicious transaction reporting and recordkeeping.

EGBA members have six months from the date of its publication (March 6) to implement the guidance, something they agreed upon before its publication.

Non-members, which the EGBA is hopeful will also sign up, are similarly given six months to implement after they agree to the guidelines.

Once a year signatories of the guidelines are required to present a report on their implementation and discuss any changes to the guidelines during an EGBA AML workshop.

Ekaterina Hartmann, the director of legal and regulatory affairs at the EGBA, told VIXIO GamblingCompliance that members of the trade group already have "a strong AML compliance culture".

"The number of changes that will need to be made by our members in order to comply with the guidelines will depend on each operator’s internal processes, and the challenges will differ both across operators and also across brands or on a group level," Hartmann said.

In a separate press release, the EGBA said its guidelines demonstrate its “commitment to ensuring that Europe’s online gambling sector actively contributes towards the fight against financial crime”.

“There’s currently a lack of sector-specific guidance to help Europe’s online gambling operators in their compliance efforts and these guidelines provide a valuable tool to fill this gap and help operators achieve the highest possible standards,” Hartmann said.

The guidelines only cover the B2C operations of gambling operators.

The EGBA counts many of the largest international operators among its ranks, including Entain, bet365, Flutter and Betsson, but its membership is currently limited to a small group of big firms.

Richard McCall, CEO at AML checking firm Armalytix, welcomed the EGBA’s announcement, adding that the gambling industry has for years been seen as “very high risk for money laundering”.

“With £11m worth of fines already issued in 2023, and Entain being [assessed] £17m at the end of 2022 for AML irregularities, there is still plenty to do. Businesses need to re-evaluate how they undertake these checks, as they currently clearly aren’t working,” McCall told VIXIO.

McCall said technology is the key for gambling companies to improve the situation, adding that open banking “allows firms to more quickly conduct AML and financial risk checks”.

Changes to AML guidelines have been on the EGBA’s radar for a while.

Publication of the guidelines follow a consultation period in Autumn 2022, where EGBA invited feedback from industry experts and national regulatory authorities.

In June last year, Hartmann told VIXIO GamblingCompliance that the industry suffers from a lack of sector-specific guidance regarding AML best practices, in particular for suspicious transaction reporting (STRs).

STR forms are not standardised across the EU, something that the EGBA hopes the newly envisioned EU anti-money laundering authority (AMLA) will change.

Additionally, the “gold-plating” of AML rules by the EU member states, which means the powers of the EU directive governing it are extended when being transposed into national laws, have posed an issue for operators in the past.

In 2021, the EGBA said its members were subject to 30 AML audits by Europe’s gambling and financial regulatory authorities and submitted nearly 13,000 suspicious activity reports to national law enforcement agencies.

Additionally, the EGBA already represents its members in various AML forums, including the European Commission and Financial Action Task Force (FATF).

A webinar on the new guidelines will be held by the EGBA soon, the trade group said.

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