Spelinspektionen Warns Zimpler of SEK25m Fine for Promoting Illegal Gambling in Sweden

Published July 11, 2023 by OCR Editor

Spelinspektionen Warns Zimpler of SEK25m Fine for Promoting Illegal Gambling in Sweden

Swedish regulator Spelinspektionen has warned payment provider Zimpler about its involvement with unlicensed operators. Failure to comply by 31 July could result in a hefty fine of SEK25m.

Swedish regulatory authority Spelinspektionen has notified payment provider Zimpler, instructing the company to cease providing payment services involving BankID to unlicensed operators by 31 July. Failure to comply with the order will result in a severe penalty of SEK25.0m.

Spelinspektionen emphasized that Swedish gambling regulations require all market participants to hold a valid license, with unlicensed entities being excluded. The objective is to channel all gambling activities towards responsible, reliable, and controlled operators. Since 1 January, it is prohibited to promote participation in games provided without the necessary license.

The regulatory decision was based on Spelinspektionen's injunction ruling, which focused on Zimpler's use of BankID in transactions with unlicensed operators. BankID is an e-identification service used exclusively by customers in Sweden. According to Spelinspektionen, Zimpler's use of BankID in these transactions confirmed that the operators were illegally targeting Swedish players. The regulators did not disclose the operators' identities involved but initiated the investigation following an anonymous tip.

In response, Zimpler stated that it does not believe its actions violate Swedish law. However, the company committed to terminating its relationships with unlicensed websites that cater to Swedish customers. Zimpler has initiated this process and aims to conclude the withdrawal of services by the end of the third quarter.

While Zimpler claimed it was unaware that the operators needed the necessary licenses, it highlighted that its payment services are not specifically designed for gaming companies but are provided to customers across all segments. The company emphasized its commitment to regulatory compliance. It stated that it has the right to terminate any business relationship if it discovers that a customer is targeting Sweden without a valid license.

Spelinspektionen contended that there was a clear collaboration between Zimpler and unlicensed operators targeting the Swedish market. As these companies utilized Zimpler's payment services in Sweden, the regulator argued that Zimpler promoted unlicensed gambling activity.

This ruling comes on the heels of Sweden's Online Gaming Industry Association (BOS) report, which revealed that only 77% of the country's online gaming market is channeled to licensed operators. The BOS deemed this percentage critically low and called for action to increase channelization. Sweden currently aims to achieve a channelization goal of 90%.

The Swedish government recently granted Spelinspektionen additional powers to combat illegal gambling, primarily focused on payment providers. These changes enable a more efficient system for blocking payments and facilitate collaborative efforts between regulators and payment providers to combat unlicensed gambling.

Spelinspektionen has been proactive in implementing measures to strengthen the oversight of the gambling industry. As part of its ongoing efforts, the regulator has introduced fees for owners of supplier licenses and proposed increased penalty fees for operators breaching the Money Laundering Act.

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