Swedish Gambling Authority issues fines to suppliers totalling SEK3.4m

The Swedish Gambling Authority (SGA) has issued penalties and warnings to two suppliers for providing games to unlicensed operators.

Hacksaw Studios and Panda Bluemoon have been hit with sanctions of SEK2.6m (£193,048) and SEK700,000 (£51,974), respectively, after the regulator ruled the firm’s content was accessible on illegal platforms.

Hacksaw Studios has been the subject of an investigation since January of this year, though the group announced that same month that it had implemented geoblocking to ensure its software was only available in Sweden to operators that held the relevant licence.

The supplier has also claimed that it cannot take full responsibility for its operator partners’ regulatory compliance, and that it could not guarantee a partner would not make games available in markets it does not hold a licence for.

The firm added that a warning or penalty fee would be “disproportionate” and that it is the unlicensed operators that have caused the infringement in question.

However, the SGA has determined that Hacksaw’s processes were “inadequate” and views the violation of the law as “serious”.

While serious breaches often lead to a supplier’s permit being revoked, the SGA has acknowledged that Hacksaw remedied the violation since being notified by the regulator.

In the case of Panda Bluemoon, the SGA also began its investigation in January, with the supplier correcting the error on 22 January.

Panda Bluemoon has insisted that the reason its games were found on an unlicensed website stemmed from a breach of contract between the supplier and its distribution company, Mikai Tech Ltd.

Despite both this and the fact players were met with a “the game is not available from your region” message, the SGA still deemed a warning and fine as appropriate punishments for the violation.

Much like Hacksaw, Panda Bluemoon has cooperated with the SGA’s investigation and provided all relevant information.

The fine each supplier has had to pay is linked to each group’s respective turnover between July 1 2023 and December 31 2023.

The fines, which follow a penalty for Yggdrasil earlier this year, relate to Sweden’s B2B licence regulations which came into effect in July 2023.

Elsewhere, the SGA has recently been told that it lacked sufficient grounds when issuing an injunction against payment solutions provider Zimpler back in July last year.

On 22 May, Sweden’s Administrative Court has revoked the decision that saw the SGA instruct Zimpler to halt all services to unlicensed operators by the end of July 2023. 

If the warning was not heeded, the SGA made clear it would fine the supplier a total of SEK25m.

The court’s verdict reads: “Zimpler is also not aware that any relevant gambling company would provide games without the necessary licence. The Swedish Gaming Authority has an obligation according to the gaming regulation to notify payment service providers about injunctions or prohibitions.

“The Swedish Gambling Authority has not informed Zimpler about any such prohibitions in relation to the companies Zimpler has had collaborations with, or directed any bans against, the gambling companies in question. 

“Zimpler doesn’t have one obligation to investigate whether the gambling companies in question lacked the necessary licence and cannot be expected to act based on factors that are neither apparent by applicable law or regulatory guidance.

“This becomes particularly clear from the fact that the SGA’s decision is based on an unexpected and incorrect interpretation of the directional criterion.”

In response to the SGA’s warning last year, Zimpler appealed the decision and said it felt the injunction was “misdirected and incorrect with far-reaching consequences”. 

Despite this, the supplier did heed the SGA’s warning and ceased business relationships with unlicensed operators from July.

Johan Strand, Zimpler CEO, explained at the time that the company was in favour of the SGA’s decision to bolster the nation’s regulated market.

“Zimpler supports the Swedish Gambling Authority’s mission to strengthen the Swedish licensing system and consumer protection in the igaming market,” Strand said last year.

“We want to promote responsibility and compliance in the gaming industry and have for a long time invested in product development in this area.

“In dialogues with legislators and authorities, Zimpler has also proposed measures to strengthen consumer protection, for example, that Sweden-based consumers should be barred from games licensed outside of Sweden through IP address blocking and that B2B licences should be introduced for payment service providers.”

The SGA’s investigation stemmed from an anonymous tip-off and uncovered three unlicensed gambling websites had used Zimpler’s payment solution. 

The regulator also found that in some cases, Zimpler was the only deposit method available, and that the supplier’s logo appeared when users would deposit funds via bank transfer.

In light of the Administrative Court’s verdict, the SGA has confirmed it can appeal the decision to the Court of Appeal in Jönköping.