The Norwegian gambling regulator has issued a financial penalty to Norsk Tipping, the country’s state-owned betting operator, for breaching anti-money laundering (AML) rules.
Norsk Tipping must pay NOK 4.5m (£318,000) after the Lottery Authority identified an instance of AML shortcomings. Occurring in March, the case saw a player paid out NOK 25m (£1.7m) on a casino game, ‘KongKasino’.
This exceeded the typical payout limit on the game of NOK 100,000 (£7,000) and even the mega jackout of NOK 5m (£354,000). Such a payout would require substantial due diligence on the part of the gambling firm involved, under the AML rules of most well-regulated jurisdictions.
“The wrong payment is a serious breach of the money gambling act,” said Atle Hamar, Director of the Lotteries and Foundations Authority.
“This is a big wrongful payment. There is a relatively high chance that the money could have gone to a player with a gambling problem or at risk of getting it. Then those involved would have had a lot to play for.”
According to SBC News, a betting industry news outlet, local Norwegian media have singled out KongKasino as having one of the ‘highest rates of problem gamblers’. It is further estimated that 27% of all Norsk Tipping players are at ‘moderate’ risk of gambling harm.
A Norsk Tipping statement identified an ‘isolated system error’ resulting in payout limits being mistakenly overwritten. The Lottery Authority became aware of the instance when it was alerted by the player who received the payout.
Norsk TIpping added that it had been communicating with the Lottery Authority to ensure the right measures are in place to prevent any future AML breaches. The regulator took this into account when considering the penalty, which stands at 0.05% of Norsk Tipping’s 2023 turnover of NOK 9.2bn (£665.6m).
Hamar concluded: “Norsk Tipping did not have good enough security measures linked to prize payouts at KongKasino when the error occurred, and this is a serious system failure. They have subsequently introduced measures, and we have included that in the assessment of the fee.”
AML is a core licensing requirement for operators in most regulated betting markets, and infringing these requirements can lead to hefty penalties – in the UK, some operators have been charged tens of millions for such breaches.
Operators increasingly have new technological enhancements at hand to ensure more seamless AML, such as Artificial Intelligence (AI). This is not all black and white and is hardly an easy task, however, as discussed at the Payment Expert Summit last week.
