Entain's BetEnt Fined €3m For Dutch AML Violations

December 1, 2023
The Netherlands Gambling Authority has fined BetEnt, Entain’s Dutch unit, €3m for failures in anti-money laundering and counter-terrorist financing procedures.

The Netherlands Gambling Authority has fined BetEnt, Entain’s Dutch unit, €3m for failures in anti-money laundering (AML) and counter-terrorist financing procedures.

The KSA found that BetEnt frequently started AML investigations late, after large sums had been gambled away, and was lax in requesting sources of income from players.

Separately, the regulator ordered Cloudflare, a web-hosting service, to stop providing services to two affiliate websites that enable Dutch players to gamble on unlicensed websites.

The KSA said Cloudflare needs to stop providing services to nederlandscasinos.net and onlinecasinosspelen.com within two weeks or risk a penalty and/or fine.

As the regulator could not determine who owns the affiliate websites, it issued the binding instructions to Cloudflare, the regulator said.

Entain paid €850m for BetEnt, in a deal that closed in January this year. The Amsterdam-based company operates under the brand name BetCity.

KSA staff found BetEnt’s customer investigations between December 2022 and May 2023 to be inadequate.

In May 2022, the regulator had warned all its licensees that they needed to quickly meet standards for AML compliance.

The regulator said it had notified BetEnt in September 2022 that its transactions monitoring needed to be improved to ensure that source-of-funds investigations were launched sooner after a player lost a significant amount of money.

In addition, unusual transactions needed to be reported to the Dutch Financial Intelligence Unit in a timely manner, the regulator said.

But KSA surveys found that 28 of 30 of BetEnt’s investigations of customer risk profiles were inadequate during the period, the regulator wrote.

KSA staff also found that some players were able to deposit or lose large sums of money without BetEnt investigating source of funds, or that it was not doing an investigation until a later period.

In response, BetEnt said failures to report transactions were due to faulty software, and it has taken measures to improve its performance.

It also said it had asked the KSA several times whether measures it had taken were sufficient to meet standards, but did not get a reply.

However, the regulator said it feels that requirements are clear enough that any licensee should be able to know what is expected of them.

“The defects found by the [KSA] are also so serious that BetEnt should have known that it does not comply with the guidelines nor with the requirements,” the regulator wrote.

The defects in investigations, plus in reporting obligations, meant that the regulator found the company’s violations to be “very serious”, meriting a substantial penalty.  

In a statement, Entain said it was aware of the KSA’s September 2022 instructions to BetEnt when it closed the deal in January and “the legal documentation relating to the acquisition contains customary contractual protections”. 

“Following completion, Entain commenced implementing improvements to BetCity's procedures and control frameworks, has fully co-operated with the KSA investigation and is committed to working with regulators in all its markets to ensure the highest standards of player protection,” the company said.

In April, BetEnt was also fined €400,000 by the KSA for improperly offering advertising to adults between the ages of 18 and 24.

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