Money laundering could rise in Sweden’s gambling sector this year because of increased use at unlicenced gaming companies, the country’s financial police have warned in a report.
The possibility arises from the maximum SEK5,000 ($592, €492) a week the government has placed on how much people can wager through online casinos during the coronavirus pandemic.
“Players can therefore choose to play with unlicenced gaming companies, which do not apply these gaming liability measures … Increased gambling at unlicenced gaming companies can in turn mean a drop in suspicion reports, as unlicenced gaming companies are not covered by the money laundering regulations in Sweden, nor should they be allowed to operate in the Swedish gaming market,” the police report read.
The document also revealed reports from gaming companies of suspected money laundering activity had increased by 14.8% to 705 in 2020 compared with the previous year when the industry was worth SEK24.8 bn ($2.93 bn, €2.44 bn).
Of the 72 licenced gaming companies, 27 reported at least one instance of suspected money laundering in 2020. That may indicate an under-reporting from the gaming industry, the financial police said.
“Money laundering can be done through unlicenced gaming companies in the same way as through licensed gaming companies,” the report read.
“A payment from a gaming account belonging to an unlicenced gaming company can be made through, for example, a payment institution, where it is not clear to the receiving bank that it comes from an unlicenced gaming company.
“Other forms of layering between different services and products also allow the original source to be hidden.”
Among the report’s other conclusions was that money launderers are largely the same criminal groups which pose a threat in vulnerable areas and with a strong link to drug and violent crime.
Possible measures the financial police proposed to counter money laundering included gaming companies, banks and payment institutions adapting customer knowledge and monitoring procedures plus increased supervision and control of licenced gaming companies.
“There is a risk that criminal actors may place and hide their criminal money in gaming accounts, mainly with medium-sized to large gaming companies, which are judged to have a lower risk of being declared bankrupt,” the report read.
“Monitoring systems at gaming companies are generally well developed and can detect investments of money in gaming accounts that are not turned into games. Some gaming companies also charge a fee for such non-existent gaming.
“A targeted inspection by the Swedish Gaming Inspectorate against this problem could detect gaming companies that made it possible for criminal winnings to be hidden in gaming accounts.”
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