Danish Regulator Highlights Affiliate-Related Money Laundering Risks

Denmark’s Gambling Authority, the Spillemyndigheden, has warned operators of possible money laundering dangers related to the use of affiliate companies. While affiliates are a great way for gambling companies to reach wider audiences, their use is not completely risk-free, the regulator said.

Affiliates Are Risky, the Danish Regulator Says

The Spillemyndigheden described affiliates as “marketing channels” that profit by marketing to other parties. Operators have long leveraged the services of affiliates to promote their products and grow their market share. Affiliates, on the other hand, receive payment every time they successfully redirect a player toward a client’s site or when customers make deposits into their accounts.

In Denmark, affiliates must abide by the general consumer protection and marketing rules, as well as by the Gambling Act’s rules on marketing and communication.

Criminals Can Take Advantage of the Affiliate Model

The Spillemyndigheden understood that affiliate agreements carry certain risks that a gambling operator “will be misused for money laundering.” The authority clarified that organized crime groups can exploit the terms of affiliate agreements and refer a large number of people within their criminal network as customers.

Then, criminals would deposit significant amounts of illegally acquired proceeds into gaming accounts, which may not look suspicious at first glance. Since the money is distributed among several people, it will be harder to identify by operators.

After playing through the money, the criminals would withdraw the money as “gambling winnings,” making it look legitimate. At the same time, the fraudulent affiliate firm will receive payments for the staged referrals and deposits.

Spillemyndigheden Advised Operators to Remain Vigilant

The Spillemyndigheden concluded that operators should beware of affiliate deals and keep in mind the aforementioned risks. The authority advised gambling companies to remain vigilant and keep an eye out for such suspicious activities.

The Danish gambling regulator suggested that operators might want to see whether affiliate partnerships would cause a change in their risk assessments. It added that companies should report any money laundering-related suspicions to the Financial Intelligence Unit.

More Companies Entered the Danish Market

On a more positive note, Stake.com, one of the world’s most prominent online operators just acquired MocinoPlay’s VinderCasino, securing access to Denmark. As a well-known operator in Denmark, VinderCasino provided Stake with an instant foothold in the local gaming market.

Earlier this month, Yggdrasil, one of the world’s leading providers of iGaming content, secured a license to offer its products in the country. This significant development ensured that Yggdrasil would be able to supply its hit games to the Danish community of operators, allowing local audiences to experience the best the provider has to offer.

A few months ago, Denmark introduced its new land-based bingo regulations, allowing bingo companies to apply for a license.