FIAU

Malta’s Financial Intelligence Analysis Unit (FIAU) has imposed an administrative penalty of €222,736 against Kindred Group subsidiary Trannel International Limited (Trannel), a B2C remote gaming operator, over shortcomings in the company’s customer risk assessments (CRA) and record keeping.

Following the FIAU’s assessment, which took place in October 2020, related to a lack of documentation and “inadequate” methodology in carrying out customer risk assessments.

The fine is not yet final and may be appealed before Malta’s courts.

Trannel holds a B2C licence by the Malta Gaming Authority (MGA) for Types 1, 2 and 3 gaming services, including casino, fixed odd betting (including live betting) and peer-to-peer bingo or games. Website URLs associated with Trannel, according to the MGA, are as follows:

http://www.ottokasino.com; http://www.casinohuone.com; http://www.kolikkopelit.com; http://www.storspiller.com; http://www.bingo.com; http://www.mariacasino.com; http://www.unibet.com; https://int.32Red.com

The official FIAU notification detailing the administrative penalty can be found here.

Lack of Documented DRA

In terms of the CRA process, it was noted that a significant portion of the customers who reached the €2,000 deposit threshold, as included in the Trannel’s active client list, were without a risk rating. Therefore, the FIAU found that there was a lack of evidence that the majority of the company’s customers had been duly risk assessed and assigned an appropriate risk rating during the business relationship.

Trannel’s stated failure to conduct a documented CRA for the majority of its customer base not only constituted a breach of its obligations, but also limited its ability to estbalish the proper level of customer due diligence required, as well as the degree and extent of ongoing monitoring to be performed.

Despite this, the FIAU praised Trannel for its actions following the compliance examination, saying it “proactively remediated this deficiency” by ensuring all its customers were adequately assessed, before the FIAU instructed the company on how to correct its deficiencies. It also positively noted that Trannel introduced an automated risk assessment model that becomes operational upon account registration, and continuously updates risk ratings based on gaming activity and other relevant factors.

Inadequate CRA Methodology

During the compliance examination, the CRA methodology employed by the operator was found to be ineffective and inadequate, as explained below:

  • At the time of the compliance examination, the company did not have a system in place to link multiple accounts held by the same customer, thereby impeding a holistic assessment of the customer’s activity across all accounts. In addition, each individual account underwent a risk assessment in isolation and independently from other accounts they may have.

  • The risk assessment algorithm was significantly focused on the transaction risk pillar, assigning a disproportionately lower weighting to the two other risk pillars that the Trannel took into consideration as part of its CRA process, namely the customer and geographical risk pillars. Compounding matters further, the individual risk items considered in relation to customer and geographical risk were limited, only including the customer’s age and country of registration respectively.

  • For 40 per cent of the player profiles reviewed, the risk ratings assigned following a manual review conducted by the Company’s AML team were deemed inappropriate in light of certain risk factors identified, such as significant deposit amounts, velocity of transactions and the use of higher risk payment methods.

The FIAU noted however that following the compliance assessments, remedial action was taken by Trannel, and that at the time when the operator’s representations were submitted in 2022, it was in the process of developing a new CRA framework to address shortcomings.

In addition, the FIAU stated that the operator fell short of fully complying with its record keeping obligations, and for 70 per cent of the player profiles reviewed, it failed to keep a copy of the open source intelligence obtained from the internet, keeping only webpage links and a brief note describing the contents of the same.

The FIAU went on to provide examples of the company’s shortcomings, highlighting two player profile cases were a stronger and more robust element of risk assessment was required:


Player profile 2 (high risk) – In under one and half years, this player made deposits of €3.5 million and reached a net deposit figure of more than €750,000, utilising at least 12 different payment methods. Additionally, it was observed the player’s deposits and withdrawals primarily followed a non-closed loop pattern, lacking a clear link between the payment methods used for deposits and withdrawals respectively. In a source of wealth (SOW) questionnaire completed one month after registration, the player declared that he is a merchant for goods/services and has a salary of circa €20,000 per month. While a third-party due diligence report regarding the player indicated that he owned three companies, the Trannel failed to gather information/documentation concerning the financial performance of these businesses. Adding to this, even though the player provided a tax return indicating that his total income and assets exceeded €3 million, most of the listed assets were relatively non-liquid, predominately comprising of securities. In the case of this player profile, despite there being evidence that the player had a certain level of accumulated wealth, the reality was that the player’s activity was still inconsistent with the income available at his disposal. Thus, in view of the high risk factors detailed above, which include the high value and volume of deposits, relatively short timeframe for the activity, utilisation of multiple deposit methods, and non-closed loop transactions, the Company was expected to apply adequate EDD measures and scrutinise the player’s transactions.

Player profile 3 (higher risk) – Over a period spanning less than three months, this player made deposits of over €350,000 and incurred losses equal to approximately €150,000. Residing in Vietnam, the player claimed that he works as a manager, earning around $20,000 per month. However, the Company did not obtain any additional information/documentation to substantiate the player’s source of income and ensure it was sufficient to sustain the player’s gameplay. This oversight is especially critical when taking into account the low average salary in the player’s country of residence, which contrasts with his declared monthly salary. Exacerbating matters further, there were instances where the player received funds from potential third party e-wallets, significantly elevating the risk associated with the business relationship. Hence, given the large deposits made, rapid velocity of transactions, and presence of third party deposits, the Company should have collected information and/or supporting documentation related to the player’s SOW/SOF, applied EDD measures, and scrutinised the player’s transactions.

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