AML: A YEAR IN REVIEW

Joseph Martin, CEO of Kinectify, walks Gaming America through 2023 from an anti-money laundering in gaming perspective.

2022 posed many challenges to businesses as post-pandemic supply chains continued to struggle, and pundits predicted high inflation and economic turbulence. Despite this, the gaming industry shattered revenues records again in 2022. The industry has been on fire since 2021 in terms of growth, innovation, and attracting large new customer segments. With this growth, risk management has taken center stage; as governments and gaming companies grapple with the epidemic of money laundering, and an uptick in payments fraud and other concerns – as new online products and services continue to scale at an amazing speed.

Here’s a recap of pressing compliance events of 2022:

JOSEPH MARTIN

Kinectify CEO

"THE ENABLERS ACT WOULD FOR THE FIRST TIME REQUIRE TRUSTED COMPANIES, LAWYERS, ART DEALERS AND OTHERS TO INVESTIGATE CLIENTS."

GLOBAL GAMING ENFORCEMENT ACTIONS INCREASE

Regulators from around the world cracked down on AML in the gaming space, particularly in Australia and Europe.

AUSTRAC (Australian Transaction Reports and Analysis Centre) commenced Federal Court proceedings against several companies, including SkyCity, Star Entertainment Group, Crown Melbourne and Crown Perth. These companies were cited and received multi-million dollar fines for failing to conduct risk assessments, and for not having risked-based controls, a board or senior management oversight; they also lacked a Transaction Monitoring Program and an EDD program to carry out additional checks on higher-risk customers.

The EU will soon launch a new AML authority called the Anti-Money Laundering Authority (AMLA) to act similarly to FinCEN in the US. In the UK, a total of 13 enforcements were issued related to AML that resulted in nearly £40m ($47.5m) in fines and three license suspensions for big names like Entain, 888, BetFred, LeoVegas and Genesis Global. In addition, the war in Ukraine has caused increased scrutiny as Russian oligarchs seek safe places to move their funds.

US NATIONAL AML RISK ASSESSMENT IDENTIFIES FRAUD AS TOP CONCERN

In the States, the US Treasury issued its National Money Laundering Risk Assessment (NMLRA) and found that fraud dwarfs all other proceed-generating crimes that are laundered in or through the US.

Concurrently, gaming organizations are seeing major upticks in payments fraud, especially as interactive and online gaming continues to boom.

US EVALUATES FURTHER AML REFORMS – ENABLERS ACT

In addition, a bipartisan group of lawmakers proposed the Enablers Act, the most significant update in AML laws in over 20 years to be included in the National Defense Authorization Act, but were ultimately unsuccessful. They hope, however, to pass it by other means in 2023.

The Enablers Act would for the first time require trusted companies, lawyers, art dealers and others to investigate clients and their source of money that is moved into the American financial system. In the past, unlike banks and other financial institutions, such middlemen have not been required to closely scrutinize the source of their clients' wealth.The failure of the Enablers Act to make it into the Defense Authorization Act comes despite increasingly high-profile support; but the debate appears far from over in the US Congress and will likely end up on the legislative docket again in 2023.

KINECTIFY AML SOFTWARE GOES LIVE IN US AND CANADA

In early 2022, Kinectify launched AML software in the US and Canadian markets that is designed specifically for gaming and casino operators. The company’s modern AML platform seamlessly integrates all of an organization’s data into a single view and workflow, thereby empowering gaming companies to efficiently manage risk across their enterprise.

In short, 2022 was a wild ride for the AML industry. All organizations should review their 2022 risk management programs and make the necessary changes needed for next year. Responsible gaming, AML and fraud risk management will be at the forefront of gaming compliance focus areas in 2023. And organizations that don’t modernize their tools and methodologies will fall behind.