Spelinspektionen AML fine to be contested by Videoslots

Sweden gavel

Videoslots has received a warning from Sweden’s Gambling Authority, Spelinspektionen, alongside a penalty fee of SEK 9m (€750k) for AML failures. 

Having been placed under supervision by the regulator since November 2021 due to “shortcomings in the work against money laundering and financing of terrorism”, the operator has once again been accused of failing to adhere to Sweden’s Money Laundering Act.

Reported to have failed to carry out adequate risk profiles and enhanced customer due-diligence checks, Videoslots is now under scrutiny for holding insufficient knowledge related to upkeep customer AML protections.

Undertaking an investigation into the operator’s AML procedures, Spelinspektionen reviewed Videoslots’ handling of potential money laundering risks, analysing the top 30 customers by deposit frequency, and top 50 by deposit amount during Jan-Mar 2020 and 2021.

In that examination, the regulator randomly selected 10 customers, with eight having deposited between SEK 1m and SEK 5.5m, while the other two deposited SEK 570,000 and SEK 620,000.

Serious compliance failures loom over Videoslots, as the online casino operator allowed customers who had been flagged to continue depositing money without verifying them through a proper KYC process. 

Further criticism was placed on Videoslots for not being efficient in gathering source of funds information and income levels for these high-spending customers. 

The operator responded with recognition that the 10 examined customers do not reflect well on its compliance procedures, suggesting that the dilemma has increased investment and resources by x10. 

However, Videoslots claimed that the investigation may have been flawed, suggesting that the examined players’ deposits could have been funded with previous winnings on their site, rather than just from their annual income. 

Additionally, the operator cited that rules on customer income level checks looking into employment and desired wagering amounts had only been introduced in May 2022, after the examined period. 

Videoslots has implemented spending limits, including mandatory loss limits and a net deposit limit of SEK 200,000 per month, since February 2022, allowing these to be adjusted once source of funds information has been gathered. 

Due to the severity of the violations and Videoslots’ GGR, the operator is set to contest Spelinspektionen’s penalty fee of SEK 9m.