Flutter Entertainment-owned The Stars Group (TSG) Interactive has been fined SEK7m (£544,225) by the Swedish Gambling Authority (SGA) for shortcomings in anti-money laundering (AML) and terrorist financing procedures that were in effect in 2023.
Betsson Nordic and Snabbare were also penalized for similar AML deficiencies, with the former fined SEK6.5m, while the latter was ordered to pay SEK5.5m.
All three have received warnings from the Swedish regulator regarding breaches of the country’s Money Laundering Act in 2023.
TSG Interactive holds a commercial online gaming and betting license in Sweden via PokerStars. The SGA’s ruling initiated an investigation on 2 May 2024 to evaluate if TSG’s AML systems adhered to the required chapters of the Act, focusing on how companies should prevent money laundering and terrorist financing.
The examination revealed that TSG Interactive, Betsson, and Snabbare all failed to conduct adequate customer due diligence and did not gather sufficient information about the origins of funds. Consequently, they could not accurately determine whether customer activities and transactions were legitimate or posed potential risks of money laundering.
On 1 June 2024, the Swedish Gambling Act was revised to modify the SGA’s system for calculating penalty payments for breaches of money laundering regulations, aiming to increase the maximum fine amount. However, as the offenses occurred in 2023, before the amendment, the penalties were assessed based on the previous system, where the maximum fine was capped at €1m.
During its investigation, the SGA reviewed the transaction histories of 10 customers aged between 18 and 29 from each company, selected from a list of 50 who had deposited the largest amounts throughout 2023. Nine out of the ten players made significant deposits without adequate or timely customer due diligence by TSG, and documentation for the tenth customer was missing. Several of these young customers, under 25, deposited large amounts without any collected information on their annual income until after the SGA began its investigations.
According to the SGA, TSG’s thresholds for implementing enhanced due diligence were excessively high. For individual transactions, this threshold was SEK212,257, with SEK424,514 in net deposits over a rolling 365-day period.
In Snabbare’s case, several customers were allowed to deposit up to SEK1m without significant checks on the source of their funds. TSG claimed ID verification requests were sent to the customer twice in 2023 in the form of a risk assessment and an electricity bill, but neither was recorded on the customer’s profile. This led to the SGA finding that TSG’s customer due diligence practices were “inadequate,” violating several provisions of the Money Laundering Act.
Besides the fines, the regulator warned that repeat offenses could lead to revocation of their Swedish market licenses. The reasons behind the significant fines were described by the SGA as due to the operators’ “serious and systematic” deficiencies in AML and terrorist financing controls.
TSG Interactive and its co-penalized companies, Betsson Nordic and Snabbare, were all noted for facing substantial fines due to breaches in money laundering regulations dating back to 2023.