The Court of Auditors Advises Lotteries to Introduce “Improvements” Against Money Laundering

In this context, the Court of Auditors has for the first time audited compliance with the legislation on the prevention of money laundering and control of prize payment and has detected that, “in a large number of prizes, the financial institutions did not send SELAE the identification documents of the prize winners.”

In its report, the Court of Auditors has noted that in relation to prize payments made between 2019 and 2022 and with data updated by SELAE in April of this year, “15,852 payment files showed a total or partial absence of documentation worth 759 million euros”. It also indicated that, in the period between 2016 and 2018, with data updated in July 2023, “incomplete files reached 24,806 for a total amount of 1,228 million euros”.

According to the court , the gambling regulations establish that prizes of more than 2,000 euros must be collected from certain financial institutions with which SELAE has signed the corresponding contract.

In this regard, the Court of Auditors’ report states that prizes paid through financial institutions present a “greater risk” in terms of preventing money laundering. “The reason is that, although the total amount of prizes paid by these entities is lower than the total amount paid through points of sale, the individual amount of the former is higher than that of the latter,” it stressed.

The Court of Auditors thus concludes that “SELAE should have required financial institutions to provide information and documentation on the prizewinners in compliance with the contracts signed between SELAE and the entities and in accordance with the regulations on the prevention of money laundering.” “This failure should have led SELAE to request the reversal or cancellation of prize payments for which it did not receive complete information. During the period in question, these requests were practically non-existent,” it stressed.

For all these reasons, the Court of Auditors recommends that SELAE “adopt all necessary measures to ensure adequate control of the receipt of all supporting documentation for prize payments and proceed without delay to claim the outstanding amount from the financial institutions, activating the claim for the retrocession if necessary.”

Despite these problems, the report concludes that the design of the anti-money laundering system defined by SELAE is, “generally speaking, adequate.” However, the Court recommends “the implementation of measures necessary to improve compliance with certain aspects of the legislation.”

These measures include improving the alert system for the Executive Service of the Commission for the Prevention of Money Laundering and Monetary Offences (SEPBLAC) to introduce, among other things, warnings in the event of failure by financial institutions to submit all documentation relating to the prizewinners.

For their part, sources from the Lottery have indicated to Europa Press that the important thing is the conclusion of the Court which concludes “that the design of the money laundering prevention system defined by SELAE is, in general terms, adequate” and they have stressed that “audits always serve to identify margins for improvement and to make continuous progress.”

SOURCE: infoLibre.