New AML regulations were approved in Spain on May 5 to clarify many issues and duties of licensed Spanish gaming and lottery operators. Going forward, gaming and lottery operators will be obliged to verify the player's identity for any prize or winnings worth €2,500 or more.
To further complicate matters, the €2,500 quota can be related to one event or also a series of connected events. At this point in time, however, the definition of how connected events are isn't clear yet and will be treated on a case by case basis.
The regulation includes more red tape for gaming and lottery operators including developing a minimum of internal control procedures. According to DLA Piper, internal controls must be documented and minimally must include the following:
- The method for identifying the participants awarded with prizes of at least €2,500 without prejudice of the identification duties applicable.
- A risk matrix that focuses on players receiving repetitive prize payments.
- Procedures to identify suspicious activities.
- Implementation of a special examination scheme which defines the procedures in place and the sources to be used, and covering the need to formalize in writing the results of said examination and the decisions adopted.
The Spanish AML regulator means business and all licensed operators must include an external auditor on an annual basis to make sure they are compliant with all aspects of the new regulation.
It is reasonable to believe that bigger gaming operators such as PokerStars(which currently controls approximately 70 percent of Spain's regulated poker market) are already prepared for the new regulation. However, the costs connected to it could turn to be too high for some of the smaller operators to continue offering licensed gaming services in Spain.
It is currently estimated that 40 percent of Spanish players are active on non-licensed sites and whether this additional red tape increases the gray market in Spain is yet to be seen. PokerNews reported last month that itdoes not appear to be a priority for the Spanish gaming regulators to increase liquidity by combining forces with other closed regulated markets such as Italy.