Identifying and recording big prize

winners

Keeping a register of winners

Checking the exact identity of online gaming customers

In-depth review of all complex transactions and possible blocking of financial transfers

Breaking off commercial relations in the event of non-identification of customers

Detection of atypical gaming events/behaviour and opening of files

Submission of suspicious transaction report files to the national financial intelligence unit

Assessment and management of money laundering and terrorism financing risks

Training staff in anti-money laundering obligations

LAND BASED NETWORK

ONLINE GAMING

Process

Context: Fight against money laundering Characteristics of gaming offers

COMBATING MONEY LAUNDERING IN A LAND BASED NETWORK

What are the risks?

FIGHT AGAINST MONEY

LAUNDERING

-Alarms -Blocks

Supervisory service files providing

information and detailing stake trends

Recurrent winnings and analysis of stakes by a supervisory and control

body

Inspection of the network

Supervision and control of point of sale activity

Analysis of the winner files

Use of information ‘from the ground’

Vigilance: What methods?

What are the difficulties and what are the solutions?

- Retailer’s intermediary role

- Knowledge of the player and

the bet amounts ( Know Your

Winner)

- Monitoring of retailers’ activity by the operator (monitoring, control and

inspection)- Direct collaboration with

government services in the event of doubt in

order to firmly establish players’ identity

- Organisation enabling this collaboration to work

effectively: State monopoly

The winnings collected by Mr F result from large stakes placed over seven months in 2012 in nine sports betting outlets in

Marseille and the surrounding area

Significant winnings (>€1 million) paid in through a large number of cheques and transfers (several dozen) are recorded in the name of Olivier F, a 36-year-old Marseille resident.It is possible to analyse all his winnings from sports bets (>€1 million) because there is only one operator in France offering and paying out on sports betting.

This means that a suspicious transaction report can be filed. This is done by the operator.

Analysis of the operator’s winners’ fileOlivier F is flagged as a recurrent winner of large amounts in theMarseille area

Case of detection and suspicion of money laundering: why the monopoly is important

The winnings collected by Mr F result from large stakes but have not been detected because they are divided between a number of establishments belonging to a number of operators

Analysis of the operator’s winners’ fileOlivier F is not flagged as a recurrent winner, because he has collected his winnings through a number of different operators

Case of detection and suspicion of money laundering: case where a number of different operators exist

Detecting the recurrent winnings and revealing the large stakes bet by the player are not possible because the bets are placed and the winnings paid through a number of different operators

COMBATING MONEY LAUNDERING IN ON LINE GAMING

What are the risks?

What are the difficulties and what are the solutions?

- Identity theft with or without the use of forged

documents

- Integration of cash through prepaid cards

- Use of a number of accounts by accomplices within operator-imposed

limits

- Pay out rate, an important consideration for money laundering, particularly in

live betting

- Banning or increased monitoring of prepaid

cards

- Analysis of the IP addresses used

- Control of bank and identity documents: limits on copy-based work and problem of bank account detail slips, which are not

official documents

- Limit pay out rates and control their use

Example no.1: using accounts opened by accomplices makes it possible to circumvent limits and facilitates money laundering

Example no. 2: using forged identity and bank documents facilitates money laundering

Forging of bank account detail slips

Different typography;the account does not belong to the person in question.

Forging of identity documents

Different typography;name changed, identity theft and possibility of opening a number of player accounts

Example no. 3: using a convenience account and prepaid cards facilitates money laundering

A 73-year-old woman bets large amounts of money in poker games (several tens of thousands of euros) having paid €40,000 into her account over a period of a few months, using only prepaid cards. Pseudonym used: ruse1

Analysis of the gaming activities, the postal and IP connexion addresses and the deposits reveal that the account is used by other members of the same family who have set up a money laundering system.

Conclusion (1/2)• In a Land Based Network:

The duty of vigilance must take into account constraints linked to the retailer’s intermediary role and the difficulty of obtaining reliable knowledge about players.

The key factors determining the success of the fight against money laundering are: – Perfect coordination between a responsible operator, the

specialised criminal investigation units and the financial intelligence units

– Recording winners with an identity card above a certain limit is an indispensable pre-condition

– The principle of a single physical network operator to prevent the dispersion of amounts to be laundered by a player or a criminal organisation

Conclusion (2/2)• On Line:

The duty of vigilance must be applied taking into account the fact that the relationship is a remote one:

– Real risk of forgery of identity and bank documents – Stake limits can be circumvented by using a number of accounts

(for example in the organisation of a criminal network) => strict checks on the customer’s registration history

– Prepaid cards make it easier to inject cash for laundering

The implementation of an effective control system to fully control these three risks requires appropriate technical, human and legal resources.