News from over in Europe today.
I wouldn’t usually cover this sort of thing but it’s quite extraordinary, and you can’t really imagine it happening over here.
In Bremen, the smallest state in Germany, every single betting shop is to be closed with immediate effect in an attempt to rid the industry of illegal money laundering operations.
Can you picture that happening in Newcastle, or Manchester? Fred Done would burst a vain.
Here’s what we know.
Money Laundering is Rife
Bremen’s interior senator has said that not a single betting shop has convinced him that they are not a front for money laundering.
There are 32 shops that have applied for a license under new gambling laws, and every one of them has been rejected. That means that it is illegal for them to accept bets effective immediately.
To get around this the firms will have to provide evidence of where their start up capital came from, something most are not expected to be able to do, since they are thought to have been opened or taken over using money from criminal activates.
According to a 2019 report this sort of thing is rife all across Germany, with 100% of betting activity in some shops thought to be simulated (so faked) in order to wash money gained from selling drugs.
Rose Gerdts-Schiffler, a spokesperson for the state, said:
“Other states in Germany are looking with close interest at what we are achieving by taking this step. If we are successful, I expect many of them will follow suit.”
So while Bremen are the first to take this drastic, and let’s face it, necessary action, the rest of Germany may soon do the same.
Franchise Bookmakers
You might be wondering how on earth this is possible.
After all, 90% of high street bookies in this country are run by a handful of massive firms, who would surely notice if this sort of thing was going on in their shops.
Well in Germany things work a little differently.
Small gambling businesses buy franchises from larger firms, and then run them independently. The franchise owner gets their share but is not actively involved in the running of each individual shop.
In this way, criminals can effectively buy a business franchise under another company’s umbrella and then run it however they like so long as they can pay their monthly royalty.
The estimated start up costs are said to be around €120,000, so if this money was gathered legally it should be easy enough to prove.
The firms have until August 5th to appeal and/or provide written evidence of where their start up capital came from.