Swedish regulator threatens Zimpler with fine over black-market payments
Payment solutions provider instructed to stop providing its services to unlicensed firms ahead of a potential SEK25m fine
The Swedish Gambling Authority (SGA) has issued an injunction to payment solutions provider Zimpler for offering its services to unlicensed operators.
Coupled with this injunction, in the event Zimpler fails to comply with the cessation by 31 July, the regulator will issue a fine of SEK25m (£1.79m).
The ruling follows an investigation into the supplier by the SGA following receipt of an anonymous tip-off that alleged payments were made on three unlicensed gambling websites using the provider’s solution.
The tip-off exposed the registration and depositing processes on these illegal sites, which showed a user choosing to deposit via bank transfer as one of the available options.
The payment solution for bank transfer in Sweden will have access to the e-identification system in the country, BankID.
The Zimpler logo appeared when the user opted to deposit funds into their betting account via a bank transfer.
In the same instance, the user was not required to enter know-your-customer (KYC) information to make the deposit.
The investigation also revealed that Zimpler was the only deposit method that could be used on the unlicensed sites in some instances.
It was also noted that the company’s logo was visible on licensed sites but not on unlicensed sites, and therefore users would be unaware that Zimpler was the mediator for their deposit unless they looked at the operator’s terms of use.
In response to the SGA’s injunction, Zimpler said it has ceased providing its payment solution to companies that do not hold a Swedish licence and expects the entire cessation process to be completed in Q3 2023 at the very latest.
By way of defence, Zimpler argued the companies it was providing its payment service to did not appear on the regulator’s list of sites that were illegally targeting Swedish players, and that the absence of its logo on these sites meant its services were not directly marketed towards customers in Sweden.
The provider further claimed that the companies it works with are EU-licensed and operate in a number of jurisdictions, including Sweden. However, the SGA rejected this argument on the grounds it wasn’t relevant to the case.
The regulator added that any solution using BankID would be inherently targeting Swedish players, highlighting that any black-market firm powered by Zimpler was then able to target Swedish customers.