26.03.2024

by Kajetan Sawicz

Casino Cosmopol Faces SEK 2 Million Fine for AML Breaches

The Swedish Gambling Authority (SGA), known as Spelinspektionen, has imposed a stern warning and a significant penalty fee on Casino Cosmopol, a subsidiary of the state-owned Svenska Spel. Following an extensive review, the authority has levied a fine of SEK 2 million (approximately $196,800) against the casino for failing to comply with anti-money laundering and counter-terrorism financing regulations.

Highlighted Cases of Non-Compliance

The SGA’s investigation into Casino Cosmopol’s operations revealed notable instances of non-compliance, particularly among the casino’s top 100 players. Eight specific cases were brought to light, illustrating the casino’s failure to adhere to required AML protocols:

  • Dubious Financial Transactions: A player, who has been a regular since November 2011, was found to gamble SEK 45,000 multiple times a week, despite having a declared monthly income of SEK 30,000. The funds for gambling were derived from loans, yet no preventive measures were taken by the casino.
  • Ignoring Voluntary Suspension: Another case involved a customer who, after concluding a self-imposed gambling suspension, frequented the casino twice a week, each time spending up to SEK 50,000, despite having a monthly income of SEK 30,000. The casino failed to scrutinize the use of borrowed money for gambling activities.
  • High Stakes from Unemployed Player: An unemployed individual, claiming to earn over SEK 100,000 per month, was allowed to wager SEK 45,000 per visit, raising significant concerns regarding the source of their funds.
  • Questionable Corporate Connections: In another instance, a customer with total losses amounting to SEK 1.1 million made frequent cash transactions. This individual’s company made substantial share dividends to Casino Cosmopol, coupled with questionable ties to the auditing firm involved.

A Pattern of AML Shortcomings

This is not the first instance of AML issues at Casino Cosmopol. The casino’s compliance with AML and terrorist financing policies has been under SGA’s scrutiny since November 2021. In 2018, the casino faced an SEK 8 million penalty for similar breaches, which was subsequently reduced upon appeal.

The regulator underscored various deficiencies, including the misclassification of certain customers as low-risk instead of high-risk and the failure to enforce agreed-upon gambling limits for some players.

In response, Svenska Spel has acknowledged the regulatory improvements highlighted by the SGA, emphasizing the adoption of advanced tools and procedures to enhance its AML efforts.

Our Comment on the Article

The recent penalty imposed on Casino Cosmopol by the SGA serves as a critical reminder of the paramount importance of rigorous anti-money laundering practices within the gambling industry. This case underscores the need for continuous vigilance and improvement in AML protocols to protect the integrity of the gambling sector and prevent the misuse of financial systems for illicit purposes. As the industry evolves, so too must the measures to safeguard it against financial crimes, ensuring a secure and trustworthy environment for all stakeholders.

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