Danish Regulator Orders Betfair to Address Anti-Money Laundering Breaches

Denmark’s regulatory authority, Spillemyndigheden, has taken action against Betfair International, a subsidiary of Flutter Entertainment, for multiple breaches of the country’s Anti-Money Laundering (AML) Act. The regulator issued three orders, highlighting deficiencies in risk assessment, business procedures, and controls. Betfair has been given a specific timeframe to rectify the breaches and submit updated documentation to ensure compliance. This article explores the details of the breaches and the consequences faced by Betfair in the Nordic region.

Order A: Inadequate Risk Assessment

Spillemyndigheden identified Betfair’s failure to adequately assess inherent risks associated with its business model. The regulator emphasised the importance of conducting comprehensive risk assessments to identify potential money laundering and terrorist financing risks. To address this breach, Betfair is required to submit an updated risk assessment within three months of the initial notice.

Order B: Deficiencies in Business Procedures and Controls

Spillemyndigheden found shortcomings in Betfair’s written business procedures related to customer due diligence measures. The regulator stated that these procedures did not adequately address the timing requirements outlined in section 10(1)(1) of the AML Act. Furthermore, Betfair’s procedures did not account for ensuring awareness of employee convictions, posing a potential risk of money laundering or terrorist financing through employee misuse. The regulator also highlighted the lack of detailed information regarding the frequency and direction of internal controls. Betfair must address these deficiencies within three months of the initial notice.

Order C: Insufficient Evidence of Controls

Betfair was unable to provide sufficient evidence of conducting controls at an appropriate frequency. These controls encompass risk management, customer due diligence measures, investigation obligations, registration and notification requirements, record-keeping, employee screening, and internal controls. To comply with Order C, Betfair has been granted a 12-month period to submit documentation demonstrating compliance with the aforementioned controls.

Reprimand for Previous Written Business Procedures

Spillemyndigheden reprimanded Betfair for its previous written business procedures, which lacked adequate provisions for controlling customers’ identity information. However, as Betfair has rectified this breach, there is no further obligation to act in this regard.

Ramifications in Sweden

Prior to the Danish AML breaches, Betfair faced penalties in Sweden. Spelinspektionen, the Swedish regulatory authority, imposed a SEK4.0 million fine on Betfair for offering bets on football competitions that were not permitted by national law. Betfair admitted to offering bets on the U21 Allsvenskan, a youth-level football league, which violated Swedish regulations that only allow wagering on the top four levels of league football. The regulator found that 224 Swedish customers placed bets amounting to SEK1.1 million on 148 matches during 2021 and 2022. While Betfair took measures to block betting on the U21 Allsvenskan and lower leagues, Spelinspektionen considered the violation serious, resulting in a fine and a formal warning.

Betfair International, owned by Flutter Entertainment, has been ordered by Danish regulator Spillemyndigheden to rectify multiple breaches of Denmark’s AML Act. The orders focus on improving risk assessment, business procedures, and controls. Betfair must comply with the given deadlines to address the breaches and submit updated documentation. Additionally, Betfair faced penalties in Sweden for offering bets on unauthorised football competitions. These regulatory actions emphasise the significance of adhering to AML regulations and complying with national gambling laws to ensure a secure and transparent betting environment.