Anti-money laundering regulations and the Serbian gambling industry

By Milos Savic, WM Equity Partners

Although Serbia has made some sizable improvements on preventing money laundering and terrorist financing activities, and from June 2019 is no longer on the FATF list of countries with strategic deficiencies in this field (the so-called blacklist), it is reasonable to expect that there are a number of challenges left for the future.

For some industries there are extra challenges comparing with others. This is the case with the gambling industry, or more precisely the games of chance industry.

But what makes this industry so special when comparing with some other non-financial industries which fall under the national AML regulation?

There are a number of reasons, but the following few might be considered important. First, this industry is moving very fast towards becoming predominantly on-line based. Although, this is a very positive development for the games of chance operators and on-line gamblers, it puts a lot of pressure on the regulator. Traditional “know your client” and other AML procedures are now becoming even more complicated to implement as there are more and more gamblers operating in an on-line environment, possibly even playing using virtual currencies. Second, a lot of questions are now raised on how to efficiently prevent the on-line operators from providing their services in countries where they are not registered i.e. how and to which extent is possible to prevent the black market. Last but not the least, is an extensive trend of merging of the gambling and gaming industry, sometimes making it very hard to understand which activity is predominant here.

Serbian national risk assessment recognized games of chance industry as one of the sectors mostly exposed to money laundering risks, indicating that a lot of actions have to be taken in this field both on the level of regulation, but also on the level of education of market participants. Although the national Gaming Authority started its operations in March 2019, we have already seen some progress and some positive messages coming. In one of his latest statements, Mr. Zoran Gasic, Director of the Serbian Gaming Authority, in his introduction speech at the SEE Gaming Forum held on 20 November, explained how important is to understand that all market participants in this industry are on the same path and that by creating partnership they will protect interest of all market participants, primarily gamblers, keeping them safe and their gambling habits under control.