The Danish Gambling Authority has identified potential money laundering risks involving affiliates marketing for gambling operators. Operators should review and update their risk assessments accordingly.
An affiliate is a marketing channel where individuals or companies earn money by promoting businesses like gambling operators. Affiliates must adhere to general consumer protection, marketing rules, and the Gambling Act’s regulations on marketing and communication. They earn revenue by attracting new customers to the operator’s website via links on their own website or social networks. These unique links track referrals, and affiliates are paid per click or receive a percentage of the new customer’s deposit.
Affiliate agreements between gambling operators and individuals or companies carry the risk of being exploited for money laundering. Organized criminal networks can misuse such agreements by referring large numbers of individuals within their network as customers using affiliate links. Illegal funds are then deposited into these accounts, appearing legitimate due to distribution across multiple users. The funds can later be withdrawn as gambling winnings, often after minimal play-through, giving the appearance of legitimate gambling activity. Affiliates also benefit by earning profits based on the number of new customers brought in under the agreement.
The Danish Gambling Authority warns operators of potential misuse for money laundering through affiliate agreements. A key sign is when most customers referred by an affiliate use the operator’s services only once and never return. Operators should consider whether such agreements necessitate updates to their risk assessments to mitigate these risks.
