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The Swedish Gambling Authority Prohibits Further Companies from Conducting Illegal Gambling Activities

September 22, 2022 | Illegal Betting

Strängnäs, SWEDEN (September 2022) — The Swedish Gaming Authority prohibits gambling companies from providing games in Sweden without the necessary license.

According to the Swedish Gambling Authority’s strategy, we prioritize measures that contribute to gambling taking place with operators who have a Swedish gambling license. The Swedish Gaming Authority, therefore, clarifies who conducts illegal online gambling by publishing banning decisions on our website.

The Swedish Gambling Authority’s work against illegal online gambling activities – strategy

The Swedish Gaming Authority must prevent illegal gambling activities

A basic prerequisite for the goals of the gambling regulation to be achieved is that those who conduct gambling activities in Sweden have a license. Those who lack the necessary license must be excluded from the Swedish gaming market. This is crucial for good consumer protection. Unregulated gambling has serious consequences for society, e.g. in the form of lost tax revenue and increased exposure to problem gamblers (prop. 2017/18:220 p. 219). The Swedish Gambling Authority, therefore, prioritizes measures that can be assumed to contribute to the channeling of gambling to legal alternatives. Part of this work is to take measures against illegal gambling activities. In this work, it must be taken into account that the Swedish Gaming Authority has no crime-fighting mission and does not investigate crimes.

This strategy1 briefly describes how Spelinspektionen intends to work against illegal gambling activities in the form of online games that are aimed at the Swedish market without the necessary license.

Games aimed at the Swedish market

 It is not permitted to provide games without a license when one is required, nor to provide unauthorized games ie. games for which a license may not be granted.

The Gambling Act applies to online games provided in Sweden regardless of whether they are provided from another country or not (see prop. 2017/18:220 p. 87). So that not all games over the internet are covered by the law’s scope of application, games that are not aimed at the Swedish market are exempted (see prop. 2017/18:220 p. 86).

A prerequisite for online gambling without a Swedish license to be considered illegal in Sweden is that it is aimed at the Swedish market. When examining whether the online game is aimed at Sweden, the Gaming Authority has, among other things, identified the following relevant factors that individually or in combination with each other may be relevant in an assessment of whether gambling is directed at Sweden. The list is not exhaustive and an assessment will be made in each individual case.

  • that deposits, withdrawals and winnings in Swedish currency are offered on the website,
  • that the website uses the national top-level domain .se,
  • that information on the website is in Swedish,
  • that the website states the conditions for participation in the game in Swedish or otherwise in the conditions refers to the fact that you are a Swedish customer,
  • that the website has a Swedish customer service/FAQ or otherwise refers to what applies if you are a Swedish customer,
  • that the website has contact information for customer service with a Swedish telephone number,
  • that the website or companies associated with the website2 use payment options and/or payment service providers that are registered in Sweden or are exclusively or largely used by Swedish consumers,
  • that the website or a company associated with the website uses an e-identification system that is exclusively or largely used by Swedish consumers, and or
  • that the company or the company’s “affiliates”3 have marketing in Swedish.

Cooperation with other actors is crucial for success

 The Swedish Gambling Authority does not have the opportunity to combat illegal gambling activities alone. A basic prerequisite for achieving success with the work is for relevant actors to act and cooperate.

Those who conduct illegal gambling activities over the internet are usually based in countries other than Sweden, including those outside the EU. This means special challenges for Swedish authorities.

There is no simple solution, or any tool that directly excludes illegal gambling from the Swedish market. However, the Swedish Gambling Inspectorate sees that there are several actors who can take measures to limit the possibility and/or the incentives to conduct illegal gambling activities in Sweden. The Swedish Gaming Authority prioritizes collaboration with these actors.

Providing illegal gambling or gambling without the necessary license is criminalised, as is the promotion of such activity. In this part, the Swedish Gaming Authority needs to cooperate with the police and prosecutors. The authority also needs to cooperate with other Swedish authorities, such as The Swedish Consumer Agency, the Swedish Financial Supervisory Authority, the Swedish Tax Agency and the Swedish Enforcement Agency.

The Swedish Gaming Authority enters into agreements with foreign gaming authorities (MoU) in order to create conditions for information exchange and collaboration. If the person who conducts illegal gambling activities in Sweden has a license in another country, the Gambling Inspectorate wants to create the conditions for the exchange of information regarding this and thus enable other countries’ supervisory authorities to act. If the person conducting illegal gambling activities has a license in another country, a letter is sent to the foreign gambling authority with information that a decision to ban the provision of games in Sweden has been drawn up.

The Swedish Gaming Authority believes that there is a great responsibility on the licensed companies to choose not to cooperate with actors who in turn cooperate or enter into agreements with companies that conduct illegal gambling activities. The Swedish Gaming Authority sees that there are also opportunities for other players to act in this area.

For example, payment service providers and suppliers of software and platforms act by making demands on their customers and partners.

Marketing companies can in turn act e.g. by working only with licensed gaming companies and thus also avoid committing promotion offences.

The illegal gambling activity must be identified

The Gambling Inspectorate considers that the best way to intervene against illegal gambling activities is to try to bring about a form of self-regulation of the market, i.e. that other players in the gaming market act to shut out illegal players. The Swedish Gaming Authority has a great responsibility in making this possible.

A basic prerequisite for other actors to be able to take measures is that it is clear which gambling companies are conducting illegal gambling activities. These actors must be identified by the Swedish Gaming Authority and it must be clearly stated on the authority’s website who they are.

In addition to the Spelinspektionen’s monitoring of the environment, we also depend on other actors in this work. It is important that the authority becomes aware of companies that direct their game to the Swedish market without the necessary license, e.g. by the actors who act on the Swedish gambling market by providing tips on matters relating to illegal gambling activities.

If a gambling company that conducts illegal gambling activities does not stop doing so during the time that the Swedish Gambling Authority’s investigation is ongoing, the Swedish Gambling Authority will decide to ban the player in question from providing games in Sweden.

The decision is then published on the authority’s website. As it can be assumed that illegal gambling activities online are often conducted by actors based outside Sweden and often also outside the EU, the Gambling Inspectorate assesses that a fine as a means of pressure cannot be assumed to be effective. Above all, taking into account the difficulties in serving such a decision and enforcing the fine. The fact that the bans are not accompanied by a fine also means that the police and prosecutors are not prevented from taking criminal measures (see chapter 19, section 7 of the Gambling Act).

The Swedish Gambling Inspectorate’s investigations and interventions must be preceded by thorough investigations with high requirements for legal certainty. It is therefore not possible for the Swedish Gaming Authority to publish any information solely based on tips or assumptions. Anyone who is suspected of breaking the law must also always be given the opportunity to speak. There is thus a built-in inertia in the system, which needs understanding.

By clearly informing which companies the Gambling Inspectorate has banned from providing games in Sweden, greater opportunities are created for players to choose legal alternatives and for other players to cooperate and enter into agreements only with legal players on the gaming market. It also creates conditions for other authorities to act within the framework of their respective areas of activity and for other actors to avoid committing promotion offences.

Intervention within the framework of a license

Some of the companies that have a license to provide online games in Sweden are part of a group with several other companies. Should a situation arise where one of the companies within the same group provides online games aimed at the Swedish market without the necessary license, the Gambling Inspectorate will also act against the license holder, by investigating whether the conditions for a license still exist. Intervention against the license holder can then take place through e.g. remark, warning or revocation according to ch. 18 Section 12 of the Gaming Act.

When examining a new application for a license, a previous violation by the applicant company of the prohibition to conduct gambling activities without the necessary license is a circumstance that indicates that the applicant is unsuitable. The same applies to persons who have held a leading position in such a company and who are subject to the suitability test.

Payment blocking and warning messages

The Swedish Gaming Authority has the option of applying to the administrative court for payment blocking of a certain account. It is the administrative court that then decides to order a certain payment service provider to block the account.

The Swedish Gaming Authority will decide whether such an application should be made based on an assessment in each individual case.

An application for payment blocking requires that the Swedish Gaming Authority has access to certain specific information, e.g. which account to block and which payment service provider the order should be directed against. When assessing whether payment blocking is a suitable and effective method in an individual case, it should be taken into account that blocking has certain limitations. When assessing whether it is justified to apply for payment blocking in an individual case, the Swedish Gaming Authority will therefore take into account in particular what measures the payment service providers can and intend to take on their own, without an injunction.

The Swedish Gambling Inspectorate also continuously considers the possibilities of issuing a warning notice. The Swedish Gaming Authority may only decide on a warning notice when there are special reasons. Such reasons may exist when the authority has reason to assume that an actor to a not insignificant extent provides games on the Swedish market without the necessary license.

With regard to warning notices, the Gambling Inspectorate follows developments in other areas and the application of similar tools by other authorities in accordance with other regulations.

SOURCE: spelinspektionen.se.

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