ITALY: Is the 4th AML Directive a risk for the market?

The implementation of the 4th AML Directive might have a considerable impact on the Italian gaming market, subject to the way the new provisions will be interpreted by the competent authorities. 

The draft law implementing the 4th AML Directive in Italy is very close to be adopted and below is – based on my first reading of the current draft – an outline of the provisions that will impact the most on the Italian gaming sector:

What might new AML provisions change for the online gaming sector?

The changes that night be more relevant for the online gaming market are:

1. The obligation to collect the players’ details at the time of the registration

At the moment operators can delay the collection of the copy of players’ IDs within 30 days from the registration and by means of the so called “fast registration” might even postpone to the expiry of such 30 day term the collection of some players’ details. The draft law implementing the 4th AML Directive allows such postponement only for “low risk” transactions, but the accompanying report of the draft law identifies the online gaming sector as a “high risk” sector. Therefore such option might no longer possible.

2. The obligation to use only “traceable” payment means

The difference between the current Italian AML law and the new draft law is that the former prohibited the usage of payment means for which it was not possible to comply with the identification obligation, while the new provision refers to the need to ensure traceability of the payment. Depending on how the provision will be interpreted, this means that anonymous payment means such as e-vouchers might be prohibited even if the player provided the copy of his ID.

In order to fill this gap and still be able to collect money in cash through shops, operators might have to either use a payment institution or an e-money issuer through a pre-paid card.

What might new AML provisions change for the VLT gaming sector?

The changes that night be more relevant for the VLT gaming market are:

1. Identification obligations also for low or no winnings

The identification obligation becomes compulsory for tickets whose value is of at least € 500 and for tickets of any value with no winnings at all or low winnings compared to the value of the ticket. This is a quite burdensome obligation introduced to avoid the practice of “cleaning money” through tickets which according to the rumours in the market seems to be a frequent practice.

2. Distributors and gaming hall managers shall able to store identification documents

The identification data referred above will have to be sent by the distributor and/or operator of the gaming hall to the concessionaire within 10 days and stored for 2 years in compliance with privacy law obligations. This requires that the gaming hall manager sets up a technical infrastructure able to store such documents with “adequate” security measures that might not be an easy obligation for small size organisations, especially in the light of the upcoming EU Data Protection Regulation.

We will see how authorities interpret such provisions. And if you found this article interesting, please share it on your favorite social media.