Global Gaming has Swedish licence revoked
Swedish Gambling Authority revokes licence over repeated AML, social responsibility and bonus failings
Global Gaming’s SafeEnt subsidiary has had its Swedish licence revoked with immediate effect for several violations of Swedish gaming law.
The Swedish Gambling Authority (SGA) conducted a full review of SafeEnt’s responsible gambling policies and found the deposit limits the company offered players were not being enforced and many players were able to continue gambling beyond their agreed limits.
In addition, SafeEnt, which operates the company’s Ninja Casino brand, was found to have “serious and systematic shortcomings” in its AML and KYC policies.
As part of its investigation, the SGA conducted a sample review of 10 of Ninja Casino’s highest depositors and the 10 customers who had lost the most with the operator.
The SGA investigation found SafeEnt did not have acceptable procedures to acquire “sufficient customer knowledge of the customer” and had not conducted any risk assessments of these players.
In addition, the SGA review found repeated bonuses were being offered to players in the form of cashpots, free spins and points. Under Swedish law, licenced operators are barred from offering players repeated bonuses.
The investigation also found that several of the bonuses being offered related to lottery gaming, something which SafeEnt was not licenced to operate under Swedish law. When asked to explain the breaches of Swedish law, SafeEnt said they would undertake measures to address the identified issues.
When approached by the regulator, SafeEnt said it would undertake measures to address the identified issues, providing the regulator with an “action plan” of changes to its internal policies.
However, EGR understands the SGA reviewed this plan and considered it to be “inadequate” in addressing the underlying breaches.
Qualifying this, the SGA said SafeEnt “still seems to lack understanding of important parts of the regulations governing the business,” and that the perceived risk of future violations was enough grounds to revoke its licence.
Global Gaming’s shares ceased trading following publication of the revocation decision.
Global Gaming shares are halted. Looks like the Swedish has dropped the ban hammer
— Fintan Costello (@FintanCostello) June 17, 2019
No comment was made by Global Gaming when approached by EGR.
Global Gaming’s lawyers confirmed the company is currently in the process of launching an appeal against the decision through the Swedish courts.
A spokersperson said the company would seek so-called “interim relief” from the SGA, asking the court to suspend the application of the decision until the legal case is fully settled.
Several complaints have been received by the Swedish Consumer Agency over the operators marketing practices
Analyst Regulus Partners said Global Gaming had been achieving its financial performance based on “aggressive levels of marketing and achieving thin operating margins”, something which Regulus thought would ultimately become unworkable in the Swedish market.
“Q119 stretched this model to breaking point, with a Swedish bonus-driven 18% fall in revenue, marketing reaching an unsustainable 63% of revenue (including affiliates) and a swing into loss (-€4m EBIT) despite capitalising 12% of personnel costs,” Regulus added.
Regulus said that the type of marketing-led disruption being used by Global Gaming was ultimately dangerous for consumers, “especially when based upon dubious business practices (whether malfeasant or just incompetent)”.