New report: Money laundering in gambling

A new report from the Swedish Financial Police presents a changed landscape for gambling in Sweden since deregulation in 2019 and the effects of Covid-19.

The gambling market has endured a couple of interesting years, to say the least. In 2019, the monopoly on the Swedish market was deregulated, in turn followed by a global pandemic which, among other things, saw Swedish casinos and horse racing tracks being closed to the public. In light of all this, a new report from the Swedish Financial Police presents the new landscape for gambling in Sweden, the risks of money laundering and the effects of Covid-19.

An increase in online gambling

As a result of remote work, isolation and closure of state casinos, trotting and galloping tracks, online gambling has increased. At the same time, the government has introduced an ordinance that imposes temporary gambling liability measures on licensed gambling companies. The measures aim to reduce problems with gambling addiction during the pandemic by, among other things, limiting deposit amounts on gambling accounts to a maximum of SEK 5,000 per week. However, this may lead to more and more people choosing to gamble with unlicensed gambling companies that do not apply the gambling liability measures and are not covered by the Money Laundering Act in Sweden.

Online gambling, betting and casinos the biggest risk

According to the Swedish Gambling Inspectorate's (Spelinspektionen) risk assessment, online gambling, betting and state casinos pose the greatest risk of money laundering. Online gambling is difficult to control as it is available 24/7 and does not require any major financial capacity on the part of a player to be able to play. Casinos, bookies and horse racing tracks also allow cash bets, which entails an increased risk of money laundering through these players.

Links to other criminal activity

The report also shows a link between money laundering in the gambling industry and vulnerable areas, drug dealing and an over-representation of links to local criminal networks. The largest link among known cases is found in the category "Drugs, weapons & violence", where 34% of reported people in the gambling industry being linked.

Procedures

Money laundering can be performed in many different ways in the gambling industry, but above all through online gaming. Some of the most common ways to launder money through online gambling are pre-determined poker games, depositing on gambling accounts without the intention to gamble, "borrowed identities" when registering new accounts or storing criminal money in gambling accounts to hide funds from authorities.

When betting through bookies or gambling at state casinos, the approaches are different. Match fixing or using casino chips are two of the most common ways to launder money.

Read the full report in Swedish here.

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