Swedish Regulator Warns Payment Firms

Sweden’s Spelinspektionen has issued a warning to payment service providers, urging them not to work with unlicensed gambling operators. In a letter sent out to a number of payment providers, the country’s regulatory body has cautioned that non-compliance is an unlawful breach of the Gaming Act.

The logo of Sweden’s gambling regulatory body, the Spelsinspektionen.

The Spelinspektionen keep Sweden’s gambling industry in check © Spelinspektionen

As the Swedish Gambling Authority, the job of the Spelinspektionen is to make sure that all gambling and lottery activities in Sweden are conducted to a certain standard. The country’s gambling industry must be ‘legal, safe and reliable’. To do this, the Spelinspektionen offers guidelines, supervises gambling bodies and provides legal permits. The Spelinspektionen is controlled by the Ministry of Finance and has a Government appointed board.

The Spelinspektionen’s letter, sent out to payment providers, makes these following statements:

“Payment service providers operating in the gaming market cannot transfer bets or winnings to and from unlicensed gaming companies, which contribute to the increased likelihood of money laundering, social damages and unfair competition. ”

“In a regulated market, it is important to protect license holders from unlicensed competition which are not authorised to operate in the Swedish market. Payment service providers that mediate bets or profits to and from unlicensed gaming companies contribute to unfair competition for the gaming companies licensed under the Gaming Act.”

There is an array of reasons why the Spelinspektionen is targeting payment service providers in this way. Apart from being, quite simply, against the law, unlicensed gambling operators are bad for the industry as a whole. For one, they no not adhere to Sweden’s gambling self-exclusion system. Spelpaus, as it is called, enables gamblers to block themselves from gambling online. This is an incredibly useful aid for recovery from a gambling addiction, as the convenience of online gambling makes it a difficult temptation to resists.

All gambling companies that are licensed in Sweden must be part of the self-exclusion register. Those who do not are taking advantage of a vulnerable consumer base. Gamblers who want to make sure that the sites they use are licensed simply need to scroll to the bottom of the site’s webpage. If the gambling operator has a license, it will be displayed with a link to the gambling authority that has issued it.

Another issue concerning unlicensed and unregulated gambling operators is that they create unfair competition for the gambling companies that are licensed. They can avoid paying taxes, giving them financial advantage over operators that do pay. They also cost the country in terms of lost tax revenues.

According to the Spelinspektionen letter, payment firms that take in money from unlicensed gambling sites could be contributing to money laundering. Funneling money through illegitimate gambling companies is one way that criminals can move illegally obtained money around, while avoiding taxes. Another concern outlined by the Spelinspektionen is terrorism, namely, financing it. Sweden’s gambling regulatory body is serious about making a point; The gambling industry must not be used for criminal intent.

A Busy Year for the Spelinspektionen

The Spelinspektionen is not all talk though. This warning comes after SafeEnt found some of their licenses revoked by the regulatory body earlier this year. SafeEnt is a subsidiary of Global Gaming, a Swedish gambling company that had been having a successful year prior to this. In fact, Global Gaming was ranked number 1 in Sweden’s top 50 fastest growing technology companies. ELK Studios, another Swedish gaming company, came fourth, showing the speed at which this industry is growing. Affected sites include NinjaCasino.com and Spellandet.com. The Spelinspektionen cited insufficient safeguards against money-laundering and inadequate customer policies as the main reasons. Since losing its license, Global Gaming has been unable to continue business.

The Spelinspektionen’s crackdown on unlicensed gambling regulators is, in part, a result of regulatory changes made earlier this year. Since a new law took effect on January 1st, gambling companies outside of the country have been able to get licenses from Spelinspektionen. The regulator has stated that this is intended to help “channel gambling into legal alternatives and minimize the supply of illegal gambling”. To clarify, while some international gambling companies can now carry Swedish gaming licenses, those without licenses are breaking the law. In turn, payment platforms that process money from unlicensed gambling operators are breaking the law too.

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