The government of Lithuania has assessed that money laundering issues in this country are quite high, especially in the casino industry.
This risk level was determined through international and national data sources, as well as international studies and reports that have bene provided by gambling businesses. The Financial Intelligence Unit, supported by supervisory law and enforcement authorities also contributed to the study.
The report finds that…
…casinos’ risk of money laundering was rated as 4 on the 1 to 4 scale. This activity was defined as “attractiveness and ability of criminals to exploit a specific medium to launder criminally obtained property.”
The Lithuanian report outlines:
“The casino sector is exposed to risk because the activity is based on a significant number of cash flows, which is attractive for organized crime groups, PEPs [politically exposed persons] and those coming from high-risk countries to launder money. The Modus operandi is easy to implement as it requires basic planning and basic knowledge of how gambling systems work.”
Also, the risk for slot machine venues as well as betting and online gambling were rated as a 3 on the scale up to 4. That is still a high risk.
The report concluded that the online gambling industry is "attractive for money laundering due to the high volume and fast execution of transactions (including cross-border transactions) as well as low identification requirements, which allows criminals to easily convert illegal funds into legitimate gambling earnings.”
A medium risk, at 2, was indicated for lottery games…
…in the report that also rated the vulnerability of every medium to money laundering, based on the totality and effectiveness of measures aimed at preventing the realization of money laundering risk.
High vulnerability was assessed for land-based casinos, betting and slot parlors - it was rated as 3.
The government remarked that casinos allow cash operations and do not verify the source of funds. “The sector has difficulties in performing customer due diligence (there is no evidence that all casinos would employ systems to identify related transactions of players), sanction checks and PEP identification.”
The report further finds that some casinos accept customers from high-risk countries like Syria and Iran. The Gambling Supervisory Authority was not well-equipped to deal with the threat of money laundering in casinos.
The report further elaborated that the number of investigations was not enough and not proportional to the sector risk.
That, it says, may be caused by the lack of human resources of the supervisory authority which "has only three employees dedicating only 15% of their time for [money laundering and terrorist financing] supervision within the sector.”
Source:
“Lithuania unveils strict new KYC rules”, igamingbusiness.com, October 5th, 2020.