Danish Financial Regulator Curbs Inpay Over iGaming AML Failures

The regulatory landscape for payment providers in the international gambling market is becoming increasingly difficult to navigate. Danish payments provider Inpay A/S is currently facing significant restrictions imposed by the national financial regulator. Following a detailed review of internal anti-money laundering (AML) procedures, the authority known as Finanstilsynet has issued a temporary ban on the company entering into new business agreements with iGaming firms. Inpay, which is licensed under the Danish Payments Act as an e-money institution, specializes in cross-border payments as a faster alternative to traditional SWIFT wire transfers.

The regulatory issues began back in March, when supervisors inspected Inpay's internal processes for combating money laundering. During this inspection, the regulator identified gaps described as serious violations. These were not isolated incidents. According to the financial authority, the violations concern the majority of the company's customer portfolio within the online gaming sector. The firm failed to provide enough evidence that the required level of customer due diligence was met when monitoring transactions. A particularly critical point is that many of these customers are located outside Denmark and often outside the European Union.

Numbers and facts

The Finanstilsynet investigation focused on compliance with the Money Laundering Act. Inpay serves a variety of corporate clients, financial institutions, and crypto enterprises. A central allegation is that Inpay failed to properly identify the purpose and intended nature of business relationships for flagged accounts. Furthermore, the firm failed to conduct proper risk assessments for business customers classified as high risk for money laundering and terrorist financing due to their structure or location.

“The Danish FSA assesses that the violations are serious, and the scope, type of customer, including the complexity of ownership structures and activities across many countries, are aggravating factors for how significant the violation is.” - Official statement, Finanstilsynet

Inpay has reportedly responded to the report by agreeing to voluntarily cease the creation of new business customer relationships with online gaming firms. This restriction will remain in place until the company can present documentation proving that its AML controls have been improved to meet the necessary legal standards. Existing business relationships appear to continue for now but are likely under increased scrutiny.

Background

The core of the issue lies in the nature of the industry itself. Online gaming is internationally recognized as a sector with an increased risk of illicit financial flows. When a payment provider accepts customers who do not hold valid EU licenses, the risk of processing illicit funds increases significantly. Such companies are often not subject to the same rigid financial protection rules as their licensed counterparts. Finanstilsynet explicitly noted that the complexity of ownership structures among many of Inpay's customers made effective monitoring difficult. As an e-money institution, Inpay must adhere to the same strict standards as traditional banks regarding the source of funds.

Why it matters for German players

For German players who prioritize safety and legality, this news serves as an important signal. In Germany, the Interstate Treaty on Gambling (GlüStV 2021) strictly regulates which providers are allowed to operate legally. Only casinos listed on the official whitelist of the Gemeinsame Glücksspielbehörde der Länder (GGL) are permitted. These legal providers must ensure their payment channels are entirely clean. While German players at licensed sites rarely encounter Inpay as a direct consumer-facing payment method, many platforms use such providers for B2B transactions behind the scenes.

Through the LUGAS system and the strict limits of 1,000 euros per month for deposits, along with the 1 euro per spin limit for slots, German players are already well-protected. When a payment provider like Inpay is sanctioned for AML failures, it shows that European regulators are working more closely together. German players should ensure they only deposit at casinos using reputable payment providers that are strictly regulated within the EU. Illegal casinos without a GGL license often resort to providers that may overlook strict Know Your Customer (KYC) requirements. The current measures in Denmark make it harder for these unlicensed operators to access the European financial system.

What it means for GGL-licensed casinos

Casinos with a German license from the GGL are obligated to work only with reliable partners. A payment provider accused of serious money laundering violations by an EU regulatory body automatically becomes a focus for compliance departments. GGL-licensed companies will likely review their partnerships to avoid coming under fire from German regulators themselves. Integrity in payment processing is a fundamental requirement for maintaining a German license. The decision by the Danish regulator thus indirectly supports the high security standards the GGL aims to establish in Germany by exerting pressure on the entire infrastructure of online gambling.