Swedish Operators Struggling with Regulatory Uncertainty and AML Issues
The Swedish Trade Association for Online Gambling (BOS) has released an anti-money laundering (AML) checklist to help the industry comply. But operators are still facing big problems, including regulatory grey areas, strained banking relationships and customer resistance during Know Your Customer (KYC) processes.
BOS publishes AML checklist
BOS’s AML checklist is a comprehensive guide for operators, focusing on risk assessments, customer due diligence (CDD) and enhanced due diligence (EDD). It also recommends whistleblowing channels and documentation.
Gustaf Hoffstedt, BOS secretary general, says: “Today we take this comprehensive approach to the problem of money laundering. The purpose is to make visible how the work against money laundering in the gambling industry can be improved. We present our report and checklist completely openly, so that even a gambling company that is not a member of BOS can use the material, if they so wish. We all win from that.”
Regulatory uncertainty hinders compliance
A report by Advisense, commissioned by BOS, shows that operators are facing big problems due to unclear guidance from the Swedish Gambling Authority (SGA). The lack of consistency in the SGA’s guidance has caused frustration and operators are calling the current framework “checkbox compliance”.
One operator said: “The Swedish Gambling Authority needs to decide what they want — a risk-based approach or something else. They need to establish a framework within which operators can work risk-based and have an open dialogue without fear of repercussions. There must be room for improvement!”
KYC and Banking relationships
Know Your Customer (KYC) is still a major problem for operators in Sweden. Many customers refuse to provide more information during enhanced due diligence and the drop off rate is as high as 90%.
Cryptocurrencies make things worse. While digital currencies are a clear money laundering risk, operators can’t completely eliminate crypto payments without losing market share.
Operators are also facing problems with their banks. Despite their efforts to comply, banks are seen as favouring “de-risking” over actually engaging with operators’ risk management.
One operator said: “Banks are not genuinely interested in whether we, as companies, manage our risks or not. They are moving toward de-risking regardless.”
