What does the Global Gaming legal challenge mean for the Swedish gambling industry?

Last week, Global Gaming was stripped of its Swedish licence by the Swedish Gambling Authority (SGA), prompting a full appeal by the Ninja Casino-operator against the decision.

In the immediate aftermath of the decision, Global Gaming interim CEO Tobias Fagerlund called the SGA’s decision “odd”, given the firm’s willingness to rectify its errors. Fagerlund said that Global Gaming had been in dialogue with the regulator and had taken all the actions required to fully comply with Swedish laws. He questioned the legality of the regulator’s actions, calling it “an unproportional action which will cause the company significant damage,”.

Under the Swedish gambling act, the regulator is empowered to revoke operator licences if it is “necessary to safeguard consumer protection or it is otherwise necessary from a general point of view”. As Global Gaming’s alleged breaches of regulations were in part around the non-imposition of deposit limits, the protection of consumers standard applies, while other breaches were in the areas relating to anti-money laundering.

The SGA can revoke a licence if the operator’s infringement of AML laws is “serious, repeated or systematic”, all of which the regulator deemed to apply. But what does this test case mean for the future of the Swedish gambling market? Kristian Wind, partner at Complianza and a former special advisor to the SGA, chats to EGR Intel about the wider implications of the case.

EGR Intel: Swedish authorities have in the past asserted the supremacy of case law in determining their policies toward gambling operators. Given this stance, if the court finds in favour of Global Gaming, do you believe this will prompt a full review/rethink by the regulator?

Kristian Wind (KW): Obviously the regulator believes this situation demands the revocation of the licence and if the court agrees with that assessment then we have the first “line” not to cross. If, on the other hand, the operator gets to keep the licence under these circumstances then it will be very hard to lose a licence in Sweden.

EGR Intel: Do you think a win for Spelinspektionen in the courts will give it license to take a tougher line with operator infractions of Swedish law?

KW: To put it simply, they would definitely know that the “line” lies somewhere short of four major violations and would presumably revoke another licence with fewer violations in the future to see where the courts draw the “line”. I think there is very little doubt that the court will find in favour of the regulator in this case so presumably we are still some cases away from finding exactly where you lose the licence in the first go.

Kristian Wind

EGR Intel: Has the regulator moved too quickly in revoking the licence straight away?

KW: Looking at the details of the case I am actually surprised that the regulator let the operator submit a remedial plan before making their decision. As we have seen previously, both responsible gambling violations and bonus violations have resulted in sanctions including “warnings” and if an operator receives such a warning it basically means that the next time you are in breach of the regulations the licence is revoked.

In this particular case you have bonus violations and very severe responsible gambling violations as well as severe AML violations and offering unlicenced lottery, of which any two would probably be enough to have the licence revoked if they happened successively. Instead the regulator gave the operator what looks like several weeks to submit a remedial plan and it was only after finding this plan wanting that they decided to revoke the licence.

EGR Intel: In your opinion does this signal a no-nonsense, zero-tolerance approach by the regulator?

KW: I think the regulator showed a willingness to let the operator remedy the situation, which I would think is the opposite of “a no-nonsense, zero-tolerance approach”. If they wanted to signal that they could probably have revoked the licence outright at a much earlier stage of the process. Looking at the case against United Lottery Solutions they showed a similar approach and only bringing revocation on the table once the operator proved to be uncooperative.

EGR Intel: Do you think we will see more operator licences revoked by the regulator in the immediate future?

KW: Well, the technical compliance deadline is a little more than a week away now, so it will be interesting to see if any operators come up short then. But that is of course simpler in terms of clear regulations. The only case I was following closely was the one against United Lottery Solutions and as alluded to previously they got off with a warning, so I am not aware of any pending cases with a potential revocation on the line.