Another compliance due diligence measure in the fight against money laundering and terrorism financing (ML/TF) is verification of the identity of the beneficial owner (BO). Some situations where the player might not be the beneficial owner are:
- In the case of both offline and online gaming, the player could play with money from members of his family or friends and share winnings with them. In this case the BOs are the player and anyone else who participated in the game.
- In the case of a married couple, under the regime of community of accrued gains, the winnings of one spouse are the winnings of the couple. Here, there are therefore two BOs.
- Where a person is mandated to play money for and on behalf of a mandator, the mandate is simply the player who, in case of a win, has rendered the money won to the mandator. In this case, the BO is different from the player.
- A person without income or wealth (e.g. a university student) plays online. In this case, the BO should be identified (e.g. the mother/father of the student).
For the purposes of identifying the BO, the operator must ask the player for a written declaration that identifies the BO (the first name, surname, date of birth, nationality and residential address of all BOs must be provided). Information given by the player must be plausible, something that is possible only if the player can explain the economic link with the BO. Even if not requested by law, Swiss lottery and sports betting operators generally ask, as corroborating evidence, for a copy of the identity document of all additional BOs and documents proving that the BOs hold a personal Swiss bank account.
As is the case for verifying player identities, once BOs are identified, their PEP status is checked and, in the event of a positive result (and under certain circumstances), the entire relationship (not only the BO who is a PEP) is submitted to enhanced due diligence measures, as explained later in Chapter 5.
When the BO is identified
As is the case for verifying the identity of players (outlined in Chapter 2), different procedures apply to offline and online games. Those differences are once again explicable by the type of business relationship with an offline or online player. Offline players enter a business relationship with the lottery and sports betting operator only when they claim their winnings. In this case, the business relationship consists of a single transaction. By contrast, online players are in a long-term business relationship with the operator, as they have an online player account. In the latter case, the operator has sight of all transactions made by the players involving their accounts.
Large-scale offline games
In the case of offline games, the rule is quite simple: the BO must be identified at the same moment the identity of the player is verified. The table in Chapter 2 for offline games is therefore suitable for both the verification of the player’s identity and the identification of the BO.
Large-scale online games
In the case of online games, the rule is more complex, since identification of the BO must take place, no later than when thresholds for verification of the player’s identity are reached, but only (the conditions below are not cumulative):
- If the lottery and sports betting operator knows or suspects that the player is not the BO (Article 9(b)(1) and Article 9(b)(2) of the OAML-FDJP):
- in reality this condition almost never occurs, as the only information about the player collected by the operator at this stage is limited to identity data and bank account evidence;
- if the bank account entered in the player’s account does not match the bank account evidence provided for the identity verification, and if the player does not modify the bank account or is unable to prove that the bank account belongs to him/her, the operator could, in this case, reasonably suspect that the player is not the BO and ask the player for the written declaration on beneficial ownership.
- If the lottery and sports betting operator notices unusual behavior when interacting with the player (Article 9(b)(3) of the OAML-FDJP):
- this condition is possible but rare, as at this stage the only contact with the player has been a letter asking for his/her identification documents;
- some unusual behavior is still detectable by the way players play. For example, a player who has always wagered small amounts of money on online scratch cards, but who suddenly starts wagering large amounts on sports betting, could be seen as exhibiting unusual behavior. This would lead to identification of a BO or, if the BO has been identified in the past, to a repetition of the verification of the BO. In some cases, detection of unusual behavior could even lead to enhanced due diligence measures, which we outline in Chapter 5.
- If GESPA informs the operator about a specific player (Article 9(b)(4) of the OAML-FDJP)
- Ifthe lottery and sports betting operator has sufficient grounds to suspect that ML/TFmay have taken place (Article 9(b)(5) of the OAML-FDJP).