The French National Sanctions Committee (CNS) has issued penalties against a French-licensed online sports betting operator and its two top executives. This July decision stemmed from the operator's failure to adhere to asset-freezing regulations designed to combat money laundering and terrorist financing, as per European Union and French laws.
The case began when the French gambling regulator (ANJ) submitted it to the CNS last year, and the ruling was upheld in July. The ANJ released the details of the decision this week.
To shield the identities of those involved from undue harm, the CNS published an anonymized decision. The betting operator, referred to as GU, has been slapped with a two-month suspension on its online betting activities alongside a €20,000 fine. In addition, Monsieur AB, the former CEO and head of the parent company, was banned from managing online betting for two months and fined €20,000. Madame BG, the compliance officer of the operator, received a similar two-month management ban and a €5,000 fine. No sanctions were placed on the legal officer or the owner and major shareholder.
The sanctions arose after a serious mishap where GU permitted a player account to be created on December 3, 2023, for an individual flagged in France’s national asset-freezing register. Despite alerts from their automated system on that same day, GU only verified the account 11 days later on December 14, 2023.
Following this, the ANJ informed GU and initiated an inquiry on January 3, 2024, which led to the account's closure the next day.
The CNS identified two main failings within GU's practices. First, GU lacked sufficient systems and protocols to promptly implement asset-freezing measures. This shortcoming allowed the creation of the restricted account despite system warnings, violating articles L.562-4-1 and R.562-1 of the French monetary and financial code. The CNS underscored that operators must take this obligation seriously to prevent prohibited accounts from being set up.
Secondly, GU failed to notify the economic minister about the incident and related transactions. This lack of communication occurred on both December 3, when a human error resulted in an inaccurate identification, and on January 4, after the account closure when clarity should have been achieved.
The CNS rejected claims regarding other breaches linked to the acceptance or execution of transactions absent verified identities or purposes due to insufficient evidence.
In France, online gambling operators face rigorous anti-money laundering and terrorism financing regulations under the monetary and financial code. Earlier this year, the ANJ released a practical guide intended to help licensed online operators enhance their ability to detect and manage different types of player fraud. Although it didn't create new legal obligations, the guide aimed to clarify compliance expectations concerning existing anti-fraud and anti-money laundering standards, urging operators to improve their terms and conditions, maintain adequate documentation, and upgrade technical standards.
