European officials are pushing ahead with plans to roll out extra money laundering checks to all forms of gambling, a move which is set to affect the way the gambling industry works across the entire European Union. Betting firms and slot machine operators have branded the European Commission’s proposals as “ridiculous” and “disproportionate”, with costs potentially running into hundreds of millions of euros. However Europe’s powerful national lotteries have backed the Commission and argue that tighter controls are much-needed as gambling is at a high risk of fraud.

Just last week, the Fourth Anti-Money Laundering Directive moved to its next stage in the European Parliament ahead of a vote set for March 2014, which it is expected to pass. National parliaments then need to approve the legislation, and it is likely to come into full effect by 2015 or 2016.

GamblingCompliance’s recent study Market Barriers: A European Online Gambling Study 2013/14 examined the proposed European Commission changes, which will reach every corner of the European gambling industry, and affect not just land-based outlets but also rapidly growing online businesses too.

Under Internal Market Commissioner Michel Barnier’s plans, all gambling firms would have to carry out identity checks on customers who bet, or even win, more than €2,000 (£1,700) in a single transaction. This would bring due diligence controls in line with those already in place for casinos.

Bookmakers, arcades, bingo firms and lotteries would all be included for the first time under the directive. Even gambling which involves an element of skill, such as poker, would be loaded with the extra checks. Banks and other payment providers will be among those affected too.

Resistance has already been fierce from Britain’s influential betting lobby. The Association of British Bookmakers (ABB), which includes the likes of William Hill and Ladbrokes, has predicted the extra checks will cause chaos on busy days and warned they will cost the industry more than £100m.

“This is a ridiculous proposal – they simply haven’t thought it through,” said ABB chief executive Dirk Vennix in July. “It’s unworkable, unnecessary and disproportionate. On a busy day at the Grand National or Glorious Goodwood you could have ten people trying to place a bet two minutes before the opening race.” Betting shops, where customers are used to relative anonymity and paying in cash, may have to install passport scanners and keep customer details for up to five years.

The Irish Bookmakers Association (IBA) has also confirmed its opposition to the plans, saying it will cost Ireland’s betting industry €15m to implement and €10m annually to administer.

It is not just commercial operators that are concerned about the changes. Finland’s slot machine monopoly, RAY, estimates that the directive would cost it €200m and affect the hundreds of small businesses which host the machines. The Finnish government is lobbying the European Commission on RAY’s behalf over fears that customer checks will cripple an industry that relies on small stakes but potentially large jackpots.

However, many of Europe’s national lotteries are far more sanguine. “We have consistently called loudly, clearly and unambiguously for an extension of the scope of the directive,” said European Lotteries president Friedrich Stickler when the directive was unveiled in February. He said that many lotteries already verify winners’ identities when their windfall exceeds a certain limit; although the trade group also welcomed lighter-touch due diligence for games with low stakes and winnings.

The European Commission’s impact assessment predicts only a marginal increase in costs for gambling operators. IT expenditure, additional staff recruitment and costs related to access to databases are all likely to hit the bottom line, according to the assessment. However, it also notes that this will be largely offset by existing “significant business as usual costs”, which include, for example, “efforts to counter the risks of fraud and cheating”.

Underpinning the draft directive is a “risk assessment” approach. The draft outlines a list of factors that could be considered as evidence for a lower or higher risk of money laundering. For example, transactions originating in other EU member states are considered to be of low geographical risk.

A number of rules from the third directive will also continue, such as recordkeeping and statistical data storage; reporting suspicious transactions; and checks on a beneficial owner’s identity.

Among the sanctions for “systematic failings” are public notices and administrative pecuniary retribution. In the case of legal persons, fines can be up to 10 percent of the total annual turnover in the preceding business year, while in the case of natural persons fines can be up to €5m.

As soon as the European Parliament passes the directive early next year, attention will turn to national parliaments. The directive sets the minimum standards for all member states, but countries can adopt even stricter anti-money laundering rules. The current draft gives countries two years to bring the laws into force, so expect plenty more lobbying from all angles by the industry before then.

About the Author

Daniel Macadam is the Europe Editor of GamblingCompliance, the leading online publisher of legal, regulatory, political and business information for the global gambling industry. GamblingCompliance provides impartial analysis to assist the industry track regulation and market developments around the world.
For more information on GamblingCompliance’s anti-money laundering e-learning course for European gambling, click here
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Μόσχα: Διαφθορά Εισαγγελικών και Αστυνομικών Αρχών

16/2/2011 

RIA Novosti

Moscow Region Prosecutors Office and the Police involved in Illegal Casino Business

The Moscow Region prosecutor’s office and the police department have been involved in the illegal gambling business, the Russian Federal Security Service (FSB) said in a statement on Monday.
“During a search, photographs and videotapes were seized as evidence of concrete ties between the heads and other staff of the Moscow Region’s prosecutor’s office with representatives of underground gambling business,” the FSB said in a statement.
The FSB seized a number of documents on the ownership of land in Moscow Region’s elite zones, application forms and copies of passports of applicants seeking work in the illegal gambling business.
The FSB said the organizers of the gambling business also paid for vacations abroad for the prosecutor’s office staff and police. The service said that illegal gambling areas were located in 15 cities in the Moscow Region and that some 1,200 slot machines were seized during the search.
Copies of documents on the assets of fugitive Russian businessman Boris Berezovsky were also confiscated during the search, the FSB said.
The office of the alleged organizer of the gambling business was located in a building which once belonged to Berezovsky. Along with documents, the FSB found paintings by Rembrandt and Picasso worth more than $5 million.
Berezovsky called the search an attempt to divert public attention from a scandal surrounding ex-Yukos head Mikhail Khodorkovsky’s sentence.
An aide to the Moscow judge who imposed a jail sentence on former Yukos CEO Mikhail Khodorkovsky in December has claimed the verdict was determined by “higher” powers and said the original verdict by Khamovniki Court Judge Viktor Danilkin was “replaced” and forced upon him against his will.
Danilkin has denied the allegations.
In 2009, Russia ordered the closure of all gaming establishments except in four specially designated areas – in the Baltic exclave of Kaliningrad, south Siberia’s Altai Territory, Primorye in the Far East, and the Azov Sea coast in southern Russia.
According to official reports, the gambling industry in Russia was thriving with turnover estimated at $6 billion in 2008. Casinos paid almost $1 billion in taxes that year.