Kindred Group has been hit with an SEK10.9m ($1m) fine and an official warning by the Swedish Gambling Authority (SGA). The regulator discovered shortcomings in Kindred’s Spooniker subsidiary when it came to safeguards against terrorist financing and anti-money laundering systems.
failed to meet its enhanced due diligence requirements
In a Wednesday press release, SGA outlined that Kindred failed to meet its enhanced due diligence requirements and failed to assess the risk of criminals using its offering to launder money or finance terrorism. In particular, the SGA highlighted a period between January 2019 and February 2022.
The SGA, known locally as the Spelinspektionen, has confirmed that Kindred has taken steps to improve its processes following the investigation and is now fully compliant.
In response to the ruling, Kindred has said that it is committed to preventing terrorist financing and money laundering, with these key areas now supposedly a priority for the company. The firm has also asked the SGA to provide some additional clarity on certain aspects of gambling legislation when it comes to necessary anti-money laundering parameters when assessing the risk profile of users.
According to Kindred, it has attempted to make process improvements over the past couple of years, including enhanced anti-money laundering procedures, new controls to identify at-risk gamblers, and more thorough risk assessments. It also has seen an uptick in the number of customers subject to a risk assessment and suspicious transaction reports sent to the financial authorities.
Tough regulatory environment
The SGA has a reputation of strictness when it comes to dealing with errant operators. It has issued many fines to operators since the re-regulated market went live in January 2019. Since then, a number of operators have complained that the online gambling regulatory framework is vague and open to interpretation.
Spooniker has already found itself on the receiving end of action from the SGA. In 2020, it was initially hit with an SEK100m ($9.6m) fine after it offered certain gambling products it was not licensed to provide, as well as offering illegal bonuses. Upon appeal, the fine was reduced to SEK50m ($4.8m).
not only dealing with regulatory issues in Sweden
Kindred is not only dealing with regulatory issues in Sweden. It is also looking at a potential eight-figure fine in Norway. Kindred has refused to comply with demands from the Norwegian regulator to cease its operations in the country. As a result, the regulator told Kindred that it must pay a daily fine until it ceases operations.