Casino Cosmopol granted new five-year licence despite Covid-19 closure
Swedish Gambling Authority awards new permit to Svenska Spel subsidiary despite questions being raised over state ownership and taxpayer cash
Svenska Spel’s land-based subsidiary Casino Cosmopol has been awarded a new gambling licence by the Swedish Gambling Authority (SGA).
The new licence runs for a five-year period after the business effectively ceased to operate from March 2020 due to the Covid-19 pandemic.
The SGA did not inspect the Casino Cosmopol business during the licensing process due to the pandemic, despite previously identifying policy issues across AML and risk management.
”The SGA has made the assessment that Casino Cosmopol has taken measures in accordance with the action plan that was drawn up prior to the new licence review,” a spokesperson for the SGA told EGR.
”Due to the pandemic, the casinos have been closed since March 2020 and still are. Therefore, supervisory activities have not been relevant,” the SGA added.
Svenska Spel was fined SEK8m (£672,000) in November 2018 after regulators found Casino Cosmopol had failed to conduct adequate risk assessments of its customers by treating every customer as a low-risk player, regardless of their risk profile.
The SGA also found the operator had insufficient customer monitoring procedures and failed to prevent at-risk customers from accessing its gambling services despite being obliged to do so.
Sweden was still an unregulated market at this point and only fully regulated in January 2019.
Casino Cosmopol argued successfully that the regulator was acting in a disproportionate way due to there being “no clear regulation or guidance” in this area, an assertion which was upheld by the Swedish courts, and saw the operator’s fine reduced to SEK3m.
Closures to the Casino Cosmopol business during lockdown have proven catastrophic for its long-term performance after revenue fell by SEK250m in Q4 2020. In August, the firm permanently closed its Sundsvall casino and has since cut more than 200 jobs in its retail operating division.
Discussing the licence renewal, BOS CEO Gustaf Hoffstedt questioned whether Sweden’s government should continue to run land-based casino operations, as provided for under the Swedish Gambling Act.
“They are a well-known gathering place for money laundering and only operators with the highest of standards have proven capable of reaching the level of AML measures that are necessary when handling cash,” Hoffstedt explained.
“The government has proven not to be one of those operators. Right now, Casino Cosmopol is bleeding money. Sports betting punters and buyers of lottery tickets in rural parts of Sweden are in practice subsidising the land-based casinos in Sweden’s three largest cities, since all of those entities are owned by Svenska Spel.
“Should they have been separated, things would have been even worse. In that case, Swedish taxpayers would have to step in and directly subsidise the casinos via a substantial shareholder’s contribution to avoid bankruptcy.
“I believe it’s a fair question to ask whether subsidising casinos should be part of the core responsibility for a state,” Hoffstedt added.