Source: https://www.isa-guide.de/english-news/articles/113215.html
Timestamp: 2019-04-25 00:03:39+00:00

Document:
The original draft of the European Commission for the 4th Anti-Money-Laundering Directive2 had provided for a uniform threshold of EUR 2000 for identification obligations for all providers. This threshold applied indiscriminately to terrestrial and to online gaming providers.
In contrast, the version of Art. 10 (1d) of the AMLD, which has now been passed, will lead to different requirements with regard to customer identification depending on the type of game. Whilst terrestrial casinos are only required to identify their customers above a transaction threshold of EUR 2000, and other gaming providers only need to do so if the paid winnings exceed EUR 2000, the identification obligation applies to online gaming providers as early as „upon the commencement of the business relationship“.
Just as the revised German Anti-Money-Laundering Act (GWG), the different treatment of online games is justified with the allegedly high money-laundering risks associated with online gaming.3 In other words: online games are said to be particularly prone to money-laundering activities, whilst terrestrial casinos and other types of gaming are considered to be less suitable in this respect.
As early as 2009, Levi found in his study on „Money Laundering Risks and E-Gaming: A European Overview and Assessment“ that regulated online gaming has hardly any relevance for money-laundering activities. Levi even described the allegation that online gaming is particularly prone to money-laundering, as a myth.5 Levi’s view has recently been confirmed by a study compiled on behalf of TÜV Austria Trust IT GmbH. The renowned experts in the area of the combat of money laundering and gaming regulation, Prof. Dr. Dr. h.c. mult. Schneider, Prof. Dr. Dr. Peren and Prof. Dr. Clement, examined the subject „Online Poker: Potential Money Laundering and Its Prevention“.
From a criminal’s perspective, money laundering must be worthwhile, i.e. must be economically attractive. Incriminated funds, i.e. funds from criminal activities, are intended to be laundered in order to be re-introduced into the regular economic cycle. Otherwise, proceeds from criminal transactions are of limited benefit for criminals. Furthermore, the money-laundering process is only successful if the funds to be laundered can be re-introduced into the regular economic cycle (so-called integration) after their placement, without too much depreciation loss through the processes applied in order to disguise their origin (so-called layering).8 Amounts below EUR 2000 have proven to be irrelevant in view of the efforts associated with the money-laundering activities.
This is logical under a number of aspects. Firstly, the supervisory authorities can easily verify compliance with regulatory requirements by the regulated gaming providers. Secondly, storing data creates an additional deterring effect against money-laundering and fraud activities in connection with regulated online gaming. Thirdly, the corresponding criminal activities become unattractive because the discovery risks for criminals as well as the expenses for money-laundering activities are increased significantly. Fourthly and finally, the financial supervisory authority is provided with a reliable calculation basis for the collection of taxes from the regulated providers.
In unusual agreement, the authors of the Inter-State Treaty and of the Schleswig-Holstein Gambling Act, stress the special significance of channelling customer demand for the other objectives of gaming regulation, even though they draw different conclusions.
On the EU level, corresponding changes to the AMLD could be agreed during the pending trilogue of European Parliament, European Commission and European Council, in order to prevent an unnecessary and, with high probability, counter-productive identification burden for the regulated online gaming providers at the beginning of customer registration.
On the national level, the competent supervisory bodies of the member states could alleviate the regulatory situation by using the option provided for in Art. 2 (1) No. 3f) of the draft Directive, which is to permit national exceptions from the identification obligation for online gaming, after coordination with the EU Commission. In this context, it would, for instance, be an option to introduce graded identification requirements depending on the sum paid in, a limitation of the permitted payment methods, and payout restrictions.
The customer identification at the beginning of the registration process with regulated online gaming providers must not be to the detriment of the channelling of customer demand into the regulated and thus state-controlled market. Whether or not workable solutions for customer identification can be found which comply with the other objectives of gaming regulation will be decisive for the success of the combat of money laundering under the 4th Anti-Money-Laundering Directive, but also for the success of the regulation of (online) gaming as a whole.
3) See BT-Drs. 17/10745, 2 et seq.
4) Riege/C. Hambach, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien 2014, Vorb GWG, par. 8 et seq.
8) For the 3-phase model, see Herzog, in: Herzog: Geldwäschegesetz (2010), Introduction par. 7 et seq.
9) Herzog, in: Herzog: Geldwäschegesetz (2010), Introduction par. 8.
10) Riege/C. Hambach, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), Vorb GWG, par. 9.
11) Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), §9a GWG, par. 4 et seq.
12) Riege/C. Hambach, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), Vorb GWG, par. 13.
13) Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), §9a GWG, par. 5 et seq.
14) Hambach/Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), §§ 4, 5 GlüG SchlH, par. 53 et seq.
15) Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), §9b GWG, par. 16.
16) Hambach/Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), §§ 1-3 GlüG SchlH, par. 11 and 25 et seq.
17) Riege, in: Streinz/Liesching/Hambach, Glücks- und Gewinnspielrecht in den Medien (2014), § 9b GWG, par. 17.

References: Art. 10
 Art. 2
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