European Gaming and Amusement Federation
EUROMAT
The European Gaming and Amusement Federation, EUROMAT, was established in 1979 to represent the European amusement and gaming industry at EU level and consists of 14 member associations from 11 European countries, namely: Bulgaria, Croatia, Germany, Italy, Ireland, Montenegro, Netherlands, Romania, Serbia, Spain, United Kingdom.
ID: 87412665203-64
Lobbying Activity
Response to Revision of EU rules on Anti-Money Laundering (new instrument)
28 Oct 2021
Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance), referred to as the 4th Anti-Money Laundering Directive, allowed member states to exempt (in full or in part) certain low-risk gambling sectors from the scope of the Directive on the basis of a national risk assessment (recital 21 and article 2.2.). This has led several countries to exempt our sector on the basis that it represents a low risk of money laundering.
We warmly welcome the European Commission’s decision to retain this flexibliity in its proposal for an AML Regulation (proposal for a Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing). This decision reflects the fact that low stakes and prizes gaming machines provide an extremely low risk of money laundering. We urge policy makers to ensure that these provisions make it to the final text of Regulation, when it is adopted by the co-legislators.
Low stakes and prizes gaming machines provide no means to launder money. The ability to launder money relies on the possibility to obscure its origin. Simply inputting cash into slot machines directly or through a Ticket In and Ticket Out system (TITO) does not obscure its origin. No paper trail is established by using a gaming machine which would allow somebody to wash money and convert illicit funds into legitimate funds.
In addition, national legislation requires that machines undergo testing prior to receiving a security certificate. This guarantees that no tampering of the machine is possible, either by the operator or the player (e.g. loading non-certified software; manipulating software loaded on the machine; manipulating data stored in the machine).
Ticket In and Ticket Out (TITO) systems, which have emerged in some EU markets in recent years, pose no money laundering risk, a fact confirmed in national risk assessments in markets where these systems exist. TITO systems do not issue receipts so offer no means to disguise the original source of funds. They also provide no opportunity to refine cash i.e. the conversion of small denomination notes into larger denomination ones, which can be more easily transported for illicit purposes and therefore assist a criminal in evading detection. It is impractical for any criminal to misuse TITO for these purposes for a number of reasons, illustrated in out attached paper.
Applying full customer due diligence requirements on low stakes and prizes machines outside of casinos in order to deal with this issue would be an unnecessary and technically unworkable burden for operators. It would require the whole product to be redesigned on the basis of a fully traceable system using player accounts linked to verifiable forms of ID. This would be a disproportionate measure which is also likely to deter those players who legitimately prefer anonymous gambling.
EUROMAT strongly supports the inclusion of the possibility for exemption of low stakes and prizes gambling, on the basis of a risk assessment, from the due diligence requirements of the Commission’s proposal. Requirements should be risk-based and we urge the co-legislators to maintain this approach as they deliberate over the final legal text.
In addition, we would welcome guidance on the identification of linked transactions as soon as possible, as recommended by the Commission's 2019 Supra-National Risk Assessment.
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