Date: 03.06.2024

by Adam Dworak

Industry Outraged by Ban on Electronic Payments in Montenegro

The gambling industry is up in arms over a recent decision by the Montenegrin government to advance with a proposed ban on electronic payments for gambling transactions.

The government has approved amendments to Article 68f of the Gambling Act, which would prohibit the use of e-banking, instant payment systems, and mobile payment services such as PayPal and Apple Pay. Instead, customers will be required to transfer funds to online gambling accounts either at physical betting shops or by using a card at a betting shop terminal.

Enhancing AML Compliance

Montenegro’s push towards this stringent measure is driven by its goal to bolster anti-money-laundering (AML) compliance as part of its bid for European Union (EU) membership. This move comes in response to concerns raised by Moneyval, the financial intelligence monitor of the Council of Europe, regarding the country’s AML protocols.

The Montenegrin government believes that limiting electronic payment options will enhance control and transparency in financial transactions related to gambling. By requiring in-person transactions at betting shops, the government aims to reduce the potential for money laundering through online gambling platforms.

However, gambling operators and industry stakeholders argue that the proposed payment restrictions are counterproductive. They claim these measures not only conflict with AML best practices but also breach European Union competition rules.

Jovana Klisić of the trade body MontenegroBet has been vocal about the adverse effects of the ban, stating, “The ban would harm operational efficiency and jeopardize employment.” She emphasized that the move would significantly disrupt the operations of gambling businesses, leading to potential job losses in an already struggling economy.

In a show of public discontent, a petition against the measures garnered 25,000 signatures within just five days back in March, indicating widespread opposition to the government’s plan.

Compatibility with EU Directives

MontenegroBet, alongside other stakeholders, is engaging with international institutions to highlight the negative impacts of the proposed rules. They argue that these payment restrictions are incompatible with EU directives, which generally advocate for reducing cash transactions to mitigate money laundering risks.

Organizations such as Moneyval and the Financial Action Task Force (FATF) have consistently recommended the minimization of cash transactions, as digital payments provide a clearer audit trail and greater transparency. By banning electronic payments, Montenegro is, in effect, promoting more cash transactions, which contradicts these international guidelines.

The Path Forward

The Montenegrin government’s commitment to EU accession remains strong, and it views these AML measures as necessary steps towards achieving compliance with EU standards. However, the pushback from the gambling industry and concerns over economic repercussions pose significant challenges.

MontenegroBet and other industry players are hopeful that ongoing dialogues with international institutions will lead to a reconsideration of the proposed amendments. They advocate for a balanced approach that enhances AML compliance without stifling the industry’s growth and operational efficiency.