Understanding The New EU AML Rules: What iGaming Operators Need To Know

Learn about the EU’s new anti-money laundering (AML) and counter-terrorism financing (CTF) regulations and how they could impact the iGaming industry.

As the iGaming industry continues to rapidly expand, it’s also facing mounting pressure to address the crucial issue of money laundering and terrorist financing. In response to this, EU parliament committees have recently given the green light to three draft pieces of legislation, aimed at tightening EU AML/CTF rules. These changes are still underway, but their impact on the iGaming industry will be profound.

If you’re a professional in the iGaming industry, you’ll want to stay on top of these regulations and ensure your business is compliant. In this article, we’ll take a closer look at each of the proposed changes and their implications for iGaming companies.

But first of all …

What’s the motivation behind these new AML/CTF rules?

The EU is looking to bolster its AML/CTF framework by introducing a new EU authority, expanding the scope of regulated entities, and making the regulations more transparent and accountable. The ultimate goal is to strengthen the fight against money laundering and terrorist financing.

If approved, these changes will require iGaming companies to adapt their practices to comply with the new regulations. This may involve adjusting their operations, re-evaluating the types of transactions they process, and updating their documentation practices.

It’s crucial for iGaming professionals to stay informed about these developments, as non-compliance could lead to severe financial and reputational consequences. By staying ahead of the game and ensuring compliance, iGaming companies can protect themselves and their customers from potential risks.

#1 – Standardising AML/CTF Policies Across Various Domains

The EU is taking steps towards standardizing anti-money laundering and counter-terrorism financing policies across various domains, including cryptocurrency, crowdfunding, and company ownership. This move is a significant stride towards creating a more transparent and accountable financial system.

The new regulations include measures aimed at preventing financial crime, such as the requirement for gambling service providers to apply due diligence for transactions exceeding €2,000. The EU is also introducing caps on certain transactions, like cash payments and cryptocurrency transfers where the customer cannot be identified, to mitigate the risk of financial crime.

For iGaming operators, these new regulations may entail modifying transaction monitoring, implementing new due diligence procedures, and revamping record-keeping requirements.

#2 – Harmonising FIU Operations Across Member States

The EU is also stepping up its fight against money laundering and terrorist financing with the updated sixth Anti-Money Laundering Directive (6AMLD). The directive aims to harmonise the operations of Financial Intelligence Units (FIUs) across member states by providing them with more extensive access to information on beneficial ownership, bank accounts, and land registers.

To tackle money laundering more effectively, the directive requires the aggregation of information on high-value goods, such as yachts, planes, and cars worth over €200,000. This is part of the EU’s broader efforts to combat corruption, safeguard its democratic institutions, and maintain economic stability.

To ensure compliance with the updated 6AMLD, iGaming operators must understand the implications of this new legislation and adapt their transaction monitoring and due diligence procedures accordingly to comply with the new information-sharing requirements. Failure to do so could result in significant financial and reputational damage.

#3 – A New Powerful Supervisory and Investigative Body

The final piece of legislature concerns establishing the European Anti-Money Laundering Authority (AMLA), a more powerful supervisory and investigative body designed to monitor risks both within and outside the EU. The AMLA will classify financial and credit institutions according to their risk level, mandate the production of documents and information, conduct on-site visits with judicial approval, and impose significant fines for non-compliance.

With direct supervisory powers over selected entities, the AMLA aims to promote high standards, convergence, and a common culture among national supervisors while addressing problems arising from a lack of coordination between national supervisory authorities and financial intelligence units. This is crucial for ensuring more financial security in an increasingly risky cross-border environment.

To maintain compliance, iGaming professionals must understand the implications of the AMLA’s increased powers and adapt policies, procedures, and systems to align with the AMLA’s requirements. By staying informed about the new supervisory and investigative body, iGaming companies can better navigate the evolving regulatory landscape and safeguard their financial integrity.

Potential Exemptions for Gambling Services

While the new EU anti-money laundering rules aim to tighten regulations across various domains, including gambling services, there is an exemption for casinos. Member states may also exempt certain gambling services from the new rules based on a thorough risk assessment.

To qualify for an exemption, member states must assess the risks associated with the gambling service and take measures to mitigate any potential AML/CTF vulnerabilities. This may include implementing additional due diligence procedures, enhancing transaction monitoring capabilities, or requiring more extensive customer identification and verification measures.

It is important to note that jurisdictions that have previously been on the radar of international money-laundering watchdogs may find themselves subject to an increased AML/CTF burden if they fail to adequately assess and mitigate their risks. As such, gambling operators should stay informed about the latest developments in AML/CTF regulations and ensure they comply with all applicable rules to maintain a healthy and sustainable business.

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