An online gambling firm has been fined €236,000 for anti-money laundering failures.
The Financial Intelligence Analysis Unit (FIAU) fined Glitnor Services Limited after an inspection of the Malta-based firm uncovered how the company was failing to establish where money gambled by its players was coming from.
It also found how in certain instances, Glitnor was failing to obtain proof of its player’s identities and residential addresses within the 30-day legal timeframe for it to do so.
Glitnor’s internal policies and procedures were found lacking in that they did not require the company to request source of wealth and source of funds information from its clients and to create risk assessments upon a customer reaching a €2,000 threshold.
In one instance, a new customer deposited over €3,000 through 38 transactions across nine days, including €800 in two consecutive days.
These deposits over two days should have served as a trigger for Glitnor to question the spike, especially when considering that the player was a relatively new customer and no information on his income was known to the company, the FIAU said.
Despite this potential red flag, Glitnor did not supervise the client for the following six months, during which the client deposited €35,000 and withdrew €25,000, losing €10,000 over eight months.
In another example cited by the FIAU, a client deposited €61,942 over a 13-month period and lost €12,040. However, Glitnor did not check the source of this client’s funds, the FIAU said.
Another client deposited €12,100 through pre-paid cards over three months and did not withdraw any winnings, and yet no assessment on the customer’s source of funds was made by the company.
Glitnor said in its representations to the FIAU that information is sought on every player and a clear understanding is obtained of the expected level of play of each customer, based on a combination of both statistical modelling and player information.
The FIAU said that although this sounded like the correct approach, there was no evidence of such a system being in place at the time of the inspection.
It was also found that the company was failing to screen whether its clients were politically exposed persons, who carry a high money-laundering risk.
In handing down the fine, the FIAU said it was particularly concerned with Glitnor’s issues when it comes to ascertaining that the gaming activity carried out by its customers was in line with their income and wealth.
Furthermore, the inability “at times” to at least cross-check the players’ gaming activity against basic information on their employment was a cause for concern, the FIAU said.
In a statement, Glitnor said it will be appealing the fine.
Several companies over the past months have successfully appealed FIAU fines on the grounds that they are unconstitutional.
Glitnor further said that since the 2019 FIAU audit, it has voluntarily carried out two external audits in 2021 and 2022 d will further undertake another audit in October 2023.
"We believe that with such audits we further confirm that Glitnor Group is in a continuous compliant position should any further audits arise."