SkillOnNet is facing serious trouble in Denmark for violating anti-money laundering (AML) regulations. The online gambling firm has received three prohibitions and two accusations from the Danish gambling authority, Spillemyndigheden.
Spillemyndigheden made the decision after SkillOnNet submitted documents they believed satisfied AML standards. However, the regulator discovered these documents were insufficient, resulting in the three bans. These prohibitions relate to SkillOnNet’s failure to comply with AML rules concerning the maintenance of records of completed checks, internal control business processes, and risk assessments.
Furthermore, Spillemyndigheden has also charged SkillOnNet with breaching regulations regarding business processes and whistleblower programs.
The bans necessitate action from SkillOnNet. They are required to submit a revised risk assessment and examine their internal control business processes within a two-month timeframe. Additionally, they must provide evidence that their internal controls have been reviewed.
The Danish Gaming Authority declared: “Comprehensive hazard evaluations, business practices, and whistleblower agreements are essential components of anti-money laundering laws, and thus the gravity of the infractions resulted in three prohibitions and two legal actions.”
SkillOnNet, in a statement shared with iGB, said: “Skill On Net Ltd maintains high standards of anti-money laundering in Denmark, as it does in all markets it operates. We were taken aback by the Danish Gambling Authority’s (DGA) decision to issue three directives to enhance internal anti-money laundering procedures and the level of detail in documentation outlining anti-money laundering measures.
“These directives are entirely about the level of detail in the description of procedures, and SkillOnNet suspects there may be a misinterpretation. We have reached out to the DGA to fully comprehend the improvements they believe need to be made.”
A closer examination of SkillOnNet’s violations in Denmark
The initial prohibition was issued due to SkillOnNet’s inadequate risk assessment, which was found not to address the hazards of the company’s business model, including payment solutions and products, thereby breaching the obligation under Section 7 of the Anti-Money Laundering Act concerning risk assessments.
Prohibition B pertains to Section 8 of the Anti-Money Laundering Act. It concerns SkillOnNet’s written business practices failing to convey how, when, and by whom checks are conducted to ensure the implementation of internal controls.
A directive was issued as SkillOnNet struggled to maintain a record of their conducted verifications.
The Danish Gaming Authority declared the initial allegation stemmed from “faulty” business procedures for establishing customer connections prior to October 16, 2023. This was attributed to the company’s improper timing of customer checks, violating the Anti-Money Laundering Act.
The second accusation arose from SkillOnNet’s failure to scrutinize individuals in politics or their associates and business partners who had not paid a specific sum, a breach of the law.
The third allegation centered around SkillOnNet’s whistleblower program lacking anonymity. Individuals could only report issues via email. Legal requirements mandate that employees should be able to report concerns anonymously and through a separate system.
What potential consequences could SkillOnNet face?
The Danish Gaming Authority has been aggressively pursuing money laundering offenses. In July 2022, they launched a new initiative to combat money laundering.
In 2023, Tipwin was penalized 100,000 Danish kroner for violating money laundering regulations.
Tipwin faced consequences more than a year after their initial violation of regulations.
Tipwin’s transgressions were grave and negligent, mirroring those of SkillOnNet. They disregarded stipulations pertaining to risk, policies, and regulatory compliance. In addition to Tipwin, other entities such as Casumo, Casino Copenhagen, and Bet365 were also prohibited from operating due to their failure to curb money laundering.
Spillemyndigheden is also concerned about illicit gambling, not just financial malfeasance.
In a recent report, Spillemyndigheden discussed their efforts to curtail unlawful activities in 2023. This encompasses both virtual and brick-and-mortar gambling in Denmark.
They revealed that Stake.com was the most prominent entity they blocked last year. They obtained a court order to restrict access to 49 websites that were in breach of Danish regulations.
SkillOnNet encountered money laundering issues in the United Kingdom as well. The UK Gambling Commission imposed a penalty of £305,150 (€350,351/$378,299) on them for failing to adhere to anti-money laundering and responsible gaming guidelines.
They agreed to settle this penalty instead of a fine. The funds will be allocated to charitable causes.
The Commission scrutinized SkillOnNet’s operations from January 2021 to December 2022. They discovered that the company had not complied with licensing and ethical conduct requirements.
Similar to the issues in Denmark, SkillOnNet’s significant blunders in the UK stemmed from inadequate regulations, strategies, and mechanisms to curb money laundering. They also lacked robust rules and safeguards to ensure responsible gambling practices.
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