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Compliance Updates

Special Interview: A Conversation with Tom Farrell, CMO of ClearStake

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Affordability is currently the word on everyone’s lips. Operators continue to face a ‘sustainability conundrum’ – they must fulfil their regulatory obligations and commitments to player protection, while ensuring their business remains profitable. For many, affordability can spell disaster, with up to 90% of customers lost when asked to prove they have the money they are wanting to spend. However, using Open Banking to carry out these financial checks as quickly as possible may be the answer to boosting retention and retaining otherwise lost revenues.

The DCMS recently published a public consultation on the UK gambling White Paper, while the Gambling Commission launched its own on financial risk checks, bringing their importance of affordability to the top of the agenda – but operators must now strike the balance between minimising harm and maximising revenue. Affordability checks that take too long risk sending customers to competitors, or worse, the black market.

One of the key remedies to the high level of churn experienced in the past is making sure financial risk checks can be carried out quickly and with as little friction as possible, so that customers can complete them with as much ease as approving a payment while online shopping. Operators have to reach a decision quickly because the longer players wait, the more likely it is they will go elsewhere while they’re waiting.

Of course, there are some people who under no circumstances will share financial data with someone like a gambling operator. There’s also a group of people who won’t share data because they know they are gambling beyond their means. This is of course the system working as it should and that’s a good thing. But there’s a third group of people for whom it’s too much effort. They’re asked to provide bank statements, at which point they go to a competitor, as the hoops they have to jump through are not worth it.

For a customer using Open Bank technology, such as ClearStake, what used to involve downloading and printing bank statements and a wait while the operator reviews the data, now takes just 30 seconds and a few clicks. A decision is recommended to the operator immediately and theoretically, the whole process can take less than a minute. Players click a link, and they are taken to a super slick and simple process where they press a couple of buttons and the relevant financial data is shared securely. They are always in control of their data and they can revoke permission at any time.

Our software categorises every transaction and we can calculate whatever the operator wants to see. It could be disposable income, net gambling spend, total income, or current balance on the account. Our software can also evaluate the rate of change so operators can see accelerating gambling spend or consistently declining savings and work out if the player’s gambling activity is still within the safe bounds of their current financial position.

Without responsible gaming and Enhanced Due Diligence (EDD) checks, gambling risks being over-regulated out of existence as the product will become unprofitable. To answer the sustainability conundrum many operators face, we need to find a middle ground. Sustainability means not letting people spend beyond their means. It means letting people have a bet if they can afford to, while not taking more money than they can spend.

Over the last two or three years, the Gambling Commission got strict on affordability checks. They asked operators how they know someone could afford to lose ‘x’ amount. The White Paper effectively agreed with the Gambling Commission and has clarified that if someone is losing £2,000 in the space of three months or £1,000 in one month, operators should be confident about the player’s financial situation. The headline was that affordability and EDD checks should be taking place.

This discussion around affordability is not only limited to the UK, and we are seeing lawmakers and regulators in several other countries considering measures in this area.

The industry therefore needs to be proactive as the problem will never go away if it keeps allowing people to bet money they don’t have. In the public mind, gambling will have the same fate as cigarettes which are currently being regulated out of existence.

Brazil

WA. Technology Receives GLI Certification in Brazil for Casino Aggregator Product

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Global iGaming solutions provider, WA. Technology has earned Gaming Laboratories International (GLI) certification in Brazil for its casino aggregator product as it looks to expand its presence in South America.

Certification for its standalone casino aggregator product allows WA Technology to increase its range of integrated iGaming content supplied to operators in the Brazilian market.

This ever-expanding catalogue of content includes tens of thousands of games, cementing it as a more trusted partner for operators seeking to thrive in this market, with the added assurance that it fully complies with Brazilian regulatory requirements.

Meeting the necessary requirements for the casino product builds on WA Technology’s strong record in the region, where it already has an established presence and certified platform, with an experienced team of professionals based out of an office in Recife. This gives the business a unique understanding of the players in the country and the team to simplify any complexities that may arise for operators.

By making the aggregator a standalone product, the team can provide content to operators who are not already on the WA Technology platform, joining the likes of F12 Bet, which already uses the full turnkey sportsbook, casino and player account management.

The certification follows on from recent launches such as its Pick’Em player products for stats-led gameplay and Sportsbook Managed Service, to provide operators with more services and opportunities to grow.

Commenting on the certification, Phyllyp Sedicias, WA. Technology’s
Country Director for Brazil said: “This is a significant milestone for the business and signals our intent to expand further into the Brazilian market. I’m proud of the team’s hard work to secure this certificate and allow us to meet the market demands for casino games within this region.
“GLI certification for our casino aggregator product means we can now provide operators with additional opportunities to enhance their content through an experienced team with a proven track record in the region, which we look forward to growing our partnerships even further.”

The post WA. Technology Receives GLI Certification in Brazil for Casino Aggregator Product appeared first on Gaming and Gambling Industry in the Americas.

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Australia

AUSTRAC Launches Civil Penalty Proceedings Against Mounties

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AUSTRAC has launched Federal Court civil penalty proceedings against Mount Pritchard District and Community Club (Mounties), for alleged serious and systemic non-compliance with Australia’s anti-money laundering and counter-terrorism financing (AML/CTF) laws.

AUSTRAC alleges that Mounties contravened the AML/CTF Act, providing gaming services to its customers in circumstances where it had not adopted and maintained an AML CTF programme in compliance with the AML/CTF Rules.

AUSTRAC CEO Brendan Thomas said AUSTRAC alleges failures in Mounties’ approach to its anti-money laundering obligations have left it open to criminal exploitation.

“Mounties is one of the largest and most profitable club groups in NSW. It owns 10 venues, 8 of which operate approximately 1,400 poker machines and it makes hundreds of millions of dollars in revenue from money gambled on those machines,” Mr Thomas said.

“This is a big company with an even bigger responsibility to ensure its clubs are managing the risks that criminals can run dirty money through its gaming machines.

“AUSTRAC’s 2024 Money Laundering in Australia National Risk Assessment identified pubs and clubs as a medium risk sector, but when those businesses are exposed to cash, especially in circumstances where known money laundering risks are not being managed, the risk increases.”

“A business operating at this scale, in a cash intensive sector, is exposed to a high degree of money laundering risk. In 2022 for example, the NSW Crime Commission released its Project Islington report which determined that billions of the approximately $95b gambled in NSW poker machines in 2021-22 was likely to be dirty money.”

AUSTRAC alleges Mounties AML/CTF programme:

• did not have an adequate risk assessment

• did not contain appropriate staff risk awareness training

• did not contain appropriate risk based systems and controls in its transaction monitoring programme

• did not include appropriate risk based systems and controls in its enhanced customer due diligence processes

• was not subject to an independent review that met the requirements of the Rules

• and that Mounties failed to appropriately monitor a number of its customers with a view to identifying, mitigating and managing the money laundering risk that Mounties faced.

AUSTRAC also alleges Mounties failed to appropriately maintain its AML/CTF Programme, with aspects of its programme outsourced to a third party provider, Betsafe – which also provides AML/CTF programmes to a number of other pubs and clubs.

“Like many other AUSTRAC reporting entities, Mounties outsources aspects of its AML/CTF program but what it can’t outsource is its AML/CTF obligations.”

“Relying on third party providers doesn’t absolve a business of its obligations under the AML/CTF Act. If a reporting entity outsources key parts of its program to a service that is not fit for purpose – especially without proper oversight or resourcing – they run a real risk of non-compliance.

“All reporting entities, regardless of size, must stay actively involved in how their AML/CTF program is designed, implemented and monitored and I would say the same thing to other pubs and clubs who think bringing in a provider is a set and forget solution.”

AUSTRAC also alleges a number of specific instances where Mounties failed to appropriately monitor specific customers, despite the money laundering risks they presented.

“Customer due diligence and transaction monitoring in a club that processes hundreds of millions of dollars a year through its poker machines, a significant amount of which is cash, is going to require a robust approach when it comes to verifying a customer’s source of funds,” said Mr Thomas.

It is now a matter for the Federal Court of Australia to determine whether Mounties contravened the Act and, if so, what orders to make.

The post AUSTRAC Launches Civil Penalty Proceedings Against Mounties appeared first on European Gaming Industry News.

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Compliance Updates

Isle of Man Government Publishes Terrorist Financing National Risk Assessment

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The Isle of Man Government has published its first standalone Terrorist Financing (TF) National Risk Assessment (NRA), which is a significant step in strengthening the Island’s defences against terrorist financing and reinforces its commitment to international standards.

The TF NRA builds upon the findings of the 2015 and 2020 Money Laundering and Terrorist Financing NRAs and provides a focused analysis of the TF risks relevant to the Isle of Man as an international financial centre (IFC). It is a key component of the Island’s broader strategy to meet the Financial Action Task Force (FATF) recommendations on anti-money laundering, countering the financing of terrorism and countering the financing of proliferation (AML/CFT/CPF).

The assessment, which began in April 2024, involved contributions from 48 local experts, industry representatives, and international partners including the UK Home Office and the World Bank.

It concludes that the Isle of Man faces a medium-low overall risk of being used as a conduit for terrorist financing, with the highest risk identified in the area of transit TF — the potential for funds to pass through the Island’s financial system en route to other jurisdictions. Whilst it is notable that the overall rating remains the same as the last TF NRA, conducted in 2020, this report provides further assurance of that rating by the use of more detailed data, information and analysis.

The FATF is an inter-governmental body that sets standards and promotes effective measures for combating money laundering, terrorist financing and other related threats to the international financial system.

The FATF-style regional body for the Isle of Man is MONEYVAL, the Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, based in Strasbourg, France.

The Isle of Man’s efforts in combatting financial crime will be subject to an evaluation by MONEYVAL in October next year.

The Island’s main priority is to prevent, detect and disrupt criminal activity on an international scale. If the island cannot demonstrate that it meets the standards expected, the jurisdiction could referred to the “grey-listing” process. This outcome would have a significant negative impact on the economy and damage the international reputation and the ability to do business.

Jane Poole-Wilson MHK, Minister for Justice and Home Affairs, said: “This assessment is a vital tool in our ongoing efforts to protect the Isle of Man’s financial system and uphold our international obligations. It reflects the depth of collaboration across government, regulators, and industry, and highlights both our strengths and the areas where we must continue to build capacity and awareness. We are committed to ensuring that the Island remains a secure and responsible jurisdiction.”

The publication of the TF NRA will be supported by outreach to industry to help stakeholders understand and apply the key findings. A separate NRA focused on Non-Profit Organisations (NPOs) TF is also in development and will be presented for approval in due course.

The post Isle of Man Government Publishes Terrorist Financing National Risk Assessment appeared first on European Gaming Industry News.

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