Swedish Payment Provider Warned for Allowing Illegal Operator Transactions
The Stockholm-based financial institution, Zimpler, has received a stern warning from the official gambling authority of Sweden, Spelinspektionen. The warning was issued after the gambling regulator discovered transactions of Swedish players with unlicensed gambling operators via the payment provider’s portal. After the revelation, the Swedish Gambling Authority contacted Zimpler and told the institution that it could face a fine of SEK 25 million if the illegal transactions are not blocked.
Spelinspektionen has warned Zimpler over illegal gambling transactions.
©Jon Flobrant/Unsplash
Spelinspektionen is one of many gambling regulators worldwide that is involved in an active fight against unlicensed operators. The sole gambling supervisory and regulatory body of Sweden has implemented several measures over the past few years to ensure consumer protection standards of the highest level. The online gambling market of the Nordic state is one of the most active and competitive in the world. Day after day, the nation’s regulator receives applications from several gambling operators who are looking to expand their respective gambling operations by entering the strictly regulated markets of Sweden. However, quite a few gambling operators choose the easy way and offer their services to people residing in Sweden without a valid gambling permit. Some operators are licensed in another European jurisdiction and feel they should be allowed to offer their services in other jurisdictions because they maintain the European gambling standard that has been supported and propagated by the European Gaming & Betting Association (EGBA).
However, like many other European jurisdictions, the Swedish Gambling Authority does not recognize the gambling permits issued by gambling regulators of other countries. The gambling law of Sweden clearly states that all operators must obtain a valid gambling permit from Spelinspektionen to legally offer their gambling services to people in the Swedish region. Any other way of operation is deemed illegal, and the gambling authority has the right to warn, fine, and even block player access to domains that unlicensed gambling operators own. One of the many measures implemented to combat illegal gambling effectively is the new connection between the nation’s gambling regulator and the Swedish payment providers. While the Swedish government postponed plans of granting Spelinspektionen the power to block all unlicensed gambling activities, it handed out other measures, like the submission of transaction data from payment providers to the Swedish regulator. This enabled the gambling authority to detect transactions between players within its jurisdiction and unlicensed gambling operators.
Implementation of the aforementioned measure has increased the work of payment providers. An added responsibility will now force these companies to check which gambling operators are licensed in the country and which ones are not. Transactions between players and unlicensed operators will have to be halted by the payment providers themselves. It has become a tedious task, and many slip-ups are expected. The most recent one came from Zimpler. After the assessment by the Swedish Gambling Authority, it was discovered that the Swedish payment provider was allowing players to transact with illegal gambling operators. Upon detection, Spelinspektionen wasted no time in firing a warning to Zimpler and asked the entity to block all payments to unlicensed operators in its jurisdiction. If the provider does not block these payments, it could face a fine worth SEK 25 million. Zimpler has time till the end of this month to block these illegal transactions. If it fails to block them by July 31, the Swedish Gambling Authority will be forced to issue a massive fine.
A new license for an old segment
The procedure for obtaining a gambling permit in Sweden is quite straightforward. Any operator that intends to enter the Swedish gambling market must submit an application for the permit to the regulator. After a thorough paperwork and background check, the regulator sees if all criteria are met. If they do, the operator will receive its gambling permit for the jurisdiction. After gaining the license, the operator must comply with all the regulations that are specified in the country’s gambling law. In the event of non-compliance, the regulator has the right to issue warnings and fines and even has the right to revoke the license.
Until recently, Sweden only offered one type of gambling license – B2C. The gambling segment comprises two verticals – B2C and B2B. Gambling operators who offer their games and products directly to customers can operate under the B2C permit. However, several iGaming solution providers help these operators by offering iGaming software, platforms, games, and even payment gateways. These products that are offered to licensed gambling operators must also be licensed, and many of them are usually certified by the United Kingdom Gambling Commission (UKGC) or the Malta Gaming Authority (MGA).
Following in the footsteps of the regulators of other jurisdictions, the Swedish government decided to introduce a B2B supplier license into the market this year. This new license came into play this month, but the applications for it have been pouring in ever since the announcement of the supplier license was publicized. Several B2B iGaming solution providers applied for the new license and saw them get approved by the Swedish regulator. Like the B2C gambling permit, the validity of the supplier license will also be five years, after which the provider must renew it.
Extra funds to combat illicit gambling activities
Towards the end of last year, a new bill containing additional regulator powers for the gambling regulator was introduced in the Swedish Parliament. Earlier this year, it was approved, and Spelinspektionen was granted new powers and took a major positive step in the fight against illegal gambling and illicit activities related to the segment, like match-fixing and money laundering.
In addition to these powers, the government released a statement that promised an additional fund of SEK 2.4 million for the Swedish Gambling Authority. The Swedish government expects proper utilization of this fund and wants to see major progress in the fight against illegal and illicit activities revolving around the gambling segment. The additional fund was finalized as part of the Spring 2023 Amendment Budget, and the regulator received these funds last month. Over the next few months, government officials will see how the official gambling supervisory and regulatory body of the country utilizes the new powers and funds it has received.
