European Union suggests mandatory ID checks for online bettors

THE European Union is cracking down on money laundering and organised crime, and as part of the new directive, is looking at online gambling sites and considering ways they can safeguard against criminal activity.

As part of the crackdown, the EU Council is considering getting bookmakers to introduce mandatory ID checks for any customer who wagers more than €2000 – a move that aims to curb terrorist and criminal organisations that find loopholes to launder money through legitimate enterprises.

At the end of June, the European Commission introduced the Fourth Anti-Money Laundering (AML) Directive which reinforces the existing anti-money laundering rules while introducing tougher provisions. Amongst other factors, the Fourth AML directive reinforces the risk assessment obligations for banks, lawyers and accountants, establishes a coherent policy towards non-EU countries that have deficient anti-money laundering and counter-terrorism financing rules, and facilitates cooperation and exchange of information between Financial Intelligence Units from different Member States.

Upon release of the AML directive, First Vice-President Frans Timmermans said, “Laundered money is oxygen to crime, terrorism and tax-avoidance. We need to cut off its supply as best we can. Today’s stronger rules are a big step forward but we now need quick agreement on the further improvements the Commission proposed last July.”

Leading gambling jurisdictions in the European Union have released their own industry updates to remind licensees of their obligations to combat money-laundering.

The United Kingdom Gambling Commission’s industry paper reminded operators of their obligations to request identity documents from all customers. The Commission warned operators they could be putting their businesses at risk of failing to meet anti-money laundering and social responsibility requirements if they only requested identification documents when a player requested a withdrawal of their funds.

UK Gambling Commission programme director Sharon McNair said, “We urge operators to review their risk assessments and processes to ensure they are meeting their AML and social responsibility obligations. This means assessing the ongoing risks as the relationship progresses with the customer, not just at withdrawal stage.”

Similarly, the Malta Gaming Authority (MGA) published its own market update in July urging all operators and stakeholders to educate themselves on the EU’s new AML directives. The industry publication was released in consultation with the Financial Intelligence Analysis Unit (FIAU), highlighting the new provisions implemented by the European Commission and reminding operators they would need to comply with the new directives in order to maintain their MGA licenses.

All online gambling operators operating with licenses issued within the European Union are required to adhere to the new AML directives from June 26th onwards. A number of industry analysts have warned online gambling operators to be prepared to implement further regulatory and compliance requirements in the future as further anti-money laundering provisions are established.

The European Commission says it will continue reviewing the evolution of Anti-Money Laundry/Counter Financing Terrorism risks, with a new assessment being released no later than June 2019 and every two years thereafter.