What is money laundering and financing of terrorism?

Money laundering entails that a person:

• Unauthorised, receives or obtains on part of themselves or others a share in the financial proceeds of a criminal act
• Unauthorised, hides, stores, transports, helps to transfer or in another manner assists in securing the financial proceeds of a criminal act
• Attempts to participate or participates in the above.

Terrorism financing entails that a person:

• Directly or indirectly contributes with financial support to, raise or collect funds to or make financial services available for persons, groups, or organisations that commit or have intentions ofto committing acts of terror.

Obliged entities 

The Danish AML Act covers persons and legal entities that commercially provide gambling in Denmark with a licence. The Act also covers persons and legal entities that are established in Denmark and commercially provide gambling in other countries.

Partially exempted gambling products

The Minister for Taxation can exempt the offer of particular gambling products from the legislative requirements partly or entirely if the gambling product is assessed to constitute a low risk of being exploited in connection with money laundering.

The Minister for Taxation has partially exempted the following gambling products from the AML Act’s requirements:

• Lotteries
• Class lotteries
• Charity lotteries
• Local pool betting
• Gaming machines in arcades and restaurants
• Fantasy sports
• Raffles where participation requires the sending of text messages or similar
• Gambling in accordance with sections 9 to 15 of the executive order on public amusements
• Online bingo offered through television

It means that businesses or individuals offering the listed games are only subject to some provisions of the Anti-Money Laundering Act. For example, they are subject to the obligation to notify the FIU if gambling operators in connection with their provision of gambling become aware of or suspect money laundering or financing of terrorism.

What must a gambling operator be aware of?

Gambling operators play an important role in the overall combat against money laundering and financing of terrorism.
The AML Act requires that gambling operators meet several obligations. Some of the obligations are specified, in short, in the following.

The gambling operator must identify and assess the risk of being misused for purposes of money laundering and financing of terrorism. The gambling operator must prepare a written risk assessment based on the gambling operator's business model. 

In addition, the gambling operator must have sufficient written policies, procedures, and controls for efficient prevention, mitigation and management of risks  of money laundering and financing of terrorism. The procedures must be operational and thereby be directly useful to relevant employees. The procedures must be prepared based in the risk assessment and thereby the risks that are relevant for the gambling operator.

The procedures must as a minimum cover:

• Risk management
• KYC procedures
• Investigation, recording of findings, and reporting requirements
• Storage of information
• Screening of employees
• Internal controls

The gambling operator must ensure that the management and employees are instructed in the requirements of the AML Act. The gambling operator must ensure that the management and employees actually participate in the instruction and that they obtain sufficient knowledge in relation to their tasks. The instruction must be repeated and updated regularly, for example in instances where the risk assessment and procedures are updated. 

The gambling operator must know their customers and the customers' purpose with the business relation. This is called KYC procedures. It is important to ensure that a customer's purpose is not to launder money or finance terrorism. Among other things, the gambling operator must perform the procedures when a person is registered as a customer. For example when creating an account or when the customer's relevant circumstances change. In addition to this, they must be implemented at other times as well, among other things, when the customer's relevant circumstances change. 

The gambling operator must investigate the background for and the purpose of all transaction that are:

• Complex
• Unusually large
• Made in an unusual pattern
• Does not have an obvious financial or legal purpose

In addition to this, it may be relevant to expand the supervision of the customer to determine whether the transactions are suspicious. 

The gambling operator must record information about the customer, transaction or the activity and the conclusion of the investigation. The obligation to record covers both cases that lead to a notification and cases that do not result in a notification. 

The gambling operator must keep records of the various information. It applies to, for example, information collected by the gambling operator in connection with KYC procedures.

The information must be stored for at least five years after the business relation has ended or a one-off transaction has been completed. However, personal data must be deleted five years after the business relation has ended or a one-off transaction has been completed.

The gambling operator is obligated to nofity the Danish FIU if the gambling operator becomes aware of, suspects or has reasion to assume that a transaction, funds or activity has or have had relation to money laundering or financing of terrorism. The notification must take place immediately and via the portal GoAML.

For more information on gambling operators' obligations under the AML Act, please see the Danish Gambling Authority's guidance on prevention of money laundering and financing of terrorism.

Whistleblower scheme

Gambling operators with more than five employees must have a whistleblower scheme, where their employees can report breaches or potential breaches of the Anti-Money Laundering Act and rules under the Act. 

The Danish Gambling Authority also has a whistleblower scheme on money laundering, which can be used by employees or former employees of a gambling operator. Read more about the Danish Gambling Authority’s whistleblower scheme on money laundering under the tab “Contact”.
 

Inspection and responses

The Danish Gambling Authority ensures that gambling operators comply with the rules of the AML Act.

Read more about the Danish Gambling Authority's inspection and reponses under the AML Act and in the guidance on the Danish Gambling Authority's inspection.

Guidances

Legislation

Want to know more?

Money Laundering in Denmark - the national risk assessment of money laundering 2022

The national risk assessment of financing of terrorism 2024

The EU commission's site about anti-money laundering and financing of terrorism (including the supranational risk assessment)

The supranational risk assessment 2022

Annex for the supranational risk assessment 2022

The Danish Financial Supervisory Authority's Anti-Money Laundering Guide (in Danish Only)

The Danish Financial Supervisory Authority's registry of Danish politically exposed persons (PEP-list, in Danish only)

The Danish Business Authority's webpage about sanctions (in Danish only)

Hvidvask.dk - the Danish FIU

The 4th Anti-Money Laundering directive

The 5th Anti-Money Laundering directive

Financial Action Task Force's (FATF) website

Below you will find FATF's guides: 

FATF Guidance on the Risk-Based Approach for Casinos

Vulnerabilities of Casinos and Gaming Sector

Risk-Based Approach to Prepaid cards, mobile payments and internet-based payment services

FATF's guide on politically exposed persons