Posted: July 28, 2022, 11:02 am.
Last updated: July 28, 2022, 11:02 AM.
The German city of Bremen is not happy with gambling operators. It has expressed concerns about their anti-money laundering (AML) practices and has announced that all stores there will have to close.
An aerial view of Bremen, Germany. The city is forcing to close sports betting shops amid allegations that they are just fronts for money laundering. (Image: Shutterstock)
A local politician in Bremen is apparently unhappy with the state of sports betting operators, according to The Guardian. The city’s senator for the interior, Ulrich Mäurer, calls the companies, accusing them of being nothing more than fronts for money laundering.
Yesterday, the city threw up the brick wall and destroyed all 32 gambling licenses it had issued. As a result, all stores must stop accepting bets or face allegations of illegal activity.
Bremen returns to legalization of bets
Normally, the application process in the gaming industry involves a background check to determine the eligibility and legitimacy of operators and their executives. But apparently that didn’t happen in Bremen.
Mäurer demands that the Bremen licensed operators now show sources of money to receive their licenses. The companies have until August 5 to challenge his order or provide the documents to justify their status.
Bremen apparently believes that the game industry in Germany is full of money laundering issues. It highlighted a 2019 report showing that criminals are using legal gambling operations to launder black money.
The same report said that the purchase of gambling activities was also a prime target for those seeking to hide the sources of illicit funds. However, it has made no mention of the repeated AML violations for which Deutsche Bank has paid record fines or allegations that the Mecklenburg-Vorpommern state facilitated money laundering activities that benefited Russia.
According to the government, the land-based betting shops are nothing more than fronts. In addition to buying real estate to launder money, there is more questionable activity going on behind the scenes. The report stated that in many cases the bets presented by the sportsbooks were fictitious or simulated. Instead, the revenue the companies reported was money from the sale of illegal drugs.
Operators contribute to the problem
Before Mäurer dropped the hammer, Bremen has spent the last few months exploring his gambling ecosystem. The city had contacted four companies to request additional information about financing their launches.
However, none of those four responded with enough detail to allay authorities’ concerns. This raised the red flag and set the wheels in motion leading to the forced stop this week.
The problem could spread across Germany. The country is already having a hard time accepting betting and gambling after the adoption of the Fourth Interstate Convention on Gambling two years ago. However, a government spokesman, Rose Gerdts-Schiffler, indicated that other regions of Germany are now reviewing their procedures and that “many of them will follow Bremen’s example”.
The German Sports Betting Association is not happy with the city’s decision. Already embroiled in a battle over sports betting advertising, it has a mind of its own about the city’s motives. The group called the ban “arbitrary” and “legally questionable”, adding that it is motivated only by political ends.
This post Gambling shops in Bremen, Germany have to close over money laundering allegations
was original published at “https://www.casino.org/news/betting-shops-in-bremen-germany-ordered-to-close-on-money-laundering-accusations/”