spain identity verification

Spanish gaming and lottery operators are facing extensive procedural changes based on new anti-money laundering (AML) regulations. The new regulations were passed in May in the Royal Decree 304/2014, and they clarify specific aspects of Spain’s current AML and terrorism financing law, called Law 10/2010.

Spain passed Law 10/2010 on April 28th, 2010 in order to update previous legislation that the Financial Action Task Force (FATF) listed as only partially compliant with international anti-money laundering standards. Law 10/2010 extended crimes covered, covered more businesses, addressed technological developments, and enhanced regulatory supervision.

The new Decree specifically addresses the responsibility gambling operators have in order to comply with Law 10/2010 and related money laundering addendums. This is in line with the recent EU AML directive that highlighted gambling as a specific area of concern.

One of the most important specifications from Decree 304/2014 is that operators must now verify every player’s identity before paying any prize that totals €2,500 or more. The Decree states that the threshold of €2,500 “will be applicable regardless whether they are reached in a sole transaction or in several transactions when they are connected.” This means that bets resulting in different prizes that are somehow connected should still be considered. Further clarifications about what constitutes “connected prizes” might be necessary, but the regulatory board are currently considering this on a case by case base.

Decree 304/2014 also requires gambling operators to document several AML procedures including the following:

  • The method to identify which customers need to be verified
  • A risk matrix for players who receive repetitive prize payments
  • Procedures to identify suspicious activities
  • A special examination scheme that defines the procedures for analysis, information sources, and the results reporting.

In addition, all licensed gambling operators must appoint a money laundering reporting officer (MLRO), implement an annual training program, and undergo an annual examination by an external expert of their AML practices and procedures.

By requiring extensive documentation and a specific money laundering reporting position, this Decree will increase costs for lottery and gaming operators. PokerStars currently controls about 70% of the regulated poker market in Spain. Big gaming operators, such as PokerStars, should be able to address adjustments easily, but smaller operators will face challenges implementing the required changes.

Many countries are tightening controls of gaming operators specifically. Generally the AML procedures around the globe are maturing to require customer verification at on boarding as well as periodically or for specific amount thresholds, such as in the Spain Decree. Electronic identity verification (eIDV) can be challenging when verification data sources are not as mature as the AML requirements. Trulioo is continually looking for additional data sources in Countries like Spain where verification sources are more difficult to obtain. Trulioo’s Global Gateway product offers a comprehnsive identity portal to the world that supports AML and KYC identity verification needs. For more information about eIDV for the gambling industry, contact Trulioo to discuss online gambling identity verification and AML regulations today.