SGA warns and fines Kanon Gaming SEK7m over duty of care shortcomings

The Swedish Gambling Authority (SGA) has issued a warning to Kanon Gaming Limited and ordered the firm to pay SEK7m (£527,075) for duty of care failings.

Having been investigating the firm since 17 May 2023, the SGA found that Kanon Gaming had not taken the appropriate measures to help its at-risk customers reduce their gambling activity despite there being indications of excessive gambling behaviour.

During the case, the regulator requested customer data for 24 players from four groups, though this was reduced to 22 due to two players being deemed no longer relevant to the case.

The first group consisted of five players aged between 18 and 24 who lost money between 1 October to 31 December 2022, with one player asked for information from the period 1 July to 30 September 2022.

The second group came from five players aged between 25 and 44 for the same time period, this time three players were asked to provide information for January 2023.

The next group consisted of players aged between 18 and 24 who had played the most hours between 1 October and 31 December 2022.

While the final group was made up of players aged between 25 and 44 who had played the most hours during the aforementioned time period.

The SGA also requested further information such as player’s current deposit limit, number of games played per day, date and time of each played game and deposits, withdrawals and denied deposits between 1 October and 31 December 2022.

Kanon Gaming received the SGA’s request for information, which included the firm’s duty of care action plan, and sent the plan on two separate occasions, firstly in January 2023 and then again in June that same year.

A further plan was sent in April 2024.

When looking at the 22 customers, the SGA found one player made between 40 to 80 deposits per day, totalling 1,726 during the review period, while two other customers made respective deposits of 852 and 502 over the timeframe.

Another customer had 37 denied deposits, which is considered a clear indicator of excessive gambling.

One player deposited SEK68,720 and lost SEK66,617 during the review period and was deemed a medium-risk player.

Their account was closed for withdrawals on 26 September 2023 after they were asked to provide information for the origin of the funds, but the account was allowed to be reopened in November after they submitted necessary documents.

Other examples include one player losing SEK174,500 in one hour while another customer lost SEK289,974 over the review period despite having a SEK20,000 monthly deposit limit.

With all 22 customers showing various signs of excessive gambling, the SGA deemed Kanon Gaming’s duty of care to be inadequate.

The regulator ruled that insufficient communications, in some cases amounting to a single email informing users their deposit limit had been reached, meant the operator had failed to duly protect consumers.

Other single-case emails included asking customers about source of funds, before these queries were failed to be followed up the operator, with the SGA claiming no other documentation of customer interaction was available in various cases.

Kanon Gaming stated it did not dispute the SGA’s assessment that there were shortcomings in the company’s duty of care systems for players.

The firm clarified that for players who had reached their set SEK20,000 deposit limit had received an automated message to review their gambling activity but that after seven days it was no longer possible to source a list of people who had been sent the generated message.

The operator also said it has taken a “comprehensive approach to its duty of care work” and made several changes, which were implemented in May 2024.

This includes updating its action plan and internal routines surrounding problem gambling as well as introducing special restrictions and risk management for not only 18 to 24-year-olds but previously self-excluded players.

Kanon Gaming stated no customers have been able to exceed their deposit limits but admitted that the information given to the SGA gives the false impression that they were able to because of a time difference of one or two hours.

SGA said in its report: “Based on customers’ gaming behaviour, Kanon Gaming should have had more contact with the customers in order to fulfil the company’s duty of care.

“The measures that have been taken have not been sufficient to protect customers from excessive gambling as none of the customers have changed their gambling patterns.

“The company should have followed up the gambling responsibility measures that the company took due to high deposit limits or deposits that have reached SEK20,000 to ensure that the measures had the desired effect.”

The regulator added that the automated email message sent to players on spending thresholds did not lead to a change in gambling behaviour, and was furthermore considered counterproductive as it ended with a “play now” link.

The SGA concluded: “In an overall assessment of all the circumstances, the [SGA] assesses that the violations are serious and that the circumstances stated above strongly suggest that a warning is not sufficient.”

The SEK7m fine was also meted out with the recognition that Kanon Gaming had made significant improvements to its processes since the start of the investigation.