Swedish Court Cancels SEK 100 Million Penalty Imposed on Svenska Spel
*Swedish Court Reverses Gambling Authority's Decision Against Svenska Spel*
In a shocking turn of events, the Swedish Administrative Court in Linköping has overruled the Swedish Gambling Authority's (SGA) decision to penalize Svenska Spel, the state-owned gaming operator. The SGA had imposed a SEK 100 million fine and issued an official warning in March 2024 due to shortcomings in Svenska Spel's duty of care and responsible gambling efforts.
The debate revolved around the operator's handling of 10 high-spending customers displaying signs of problem gambling in 2021. The SGA contended that Svenska Spel failed to take adequate action to safeguard these players or help them limit their gaming activities as needed.
However, Svenska Spel vehemently argued that it had met its obligations under the Gambling Act by consistently monitoring player behavior and implementing responsible gaming measures when appropriate. They further maintained that, without specific legal guidelines outlining when and how to act, their efforts should be deemed sufficient under the principle of legality.
The Administrative Court sided with Svenska Spel, stating that their assessment was guided by the legality principle—authorities could only act when their actions were unequivocally supported by existing law. The court recognized that the financial losses incurred by the customers indicated excessive gambling patterns, but they also noted that Svenska Spel had implemented various measures to minimize gambling-related harm.
The court concluded that without concrete rules and practices for licensees, their intervention with a warning and a penalty fee might not be justified under the principle of legality. The court decided to overturn the SGA's decision, stressing the need for legal clarity in interpreting duty-of-care obligations.
Sweden's gaming landscape is governed by the Swedish Gambling Act of 2018, which demands stringent consumer protection and anti-harm measures from all licensed operators. The SGA is responsible for enforcing these rules, but recent events have showcased both the stringency and the evolving interpretations of these regulations.
Responsible gambling measures, such as self-exclusion tools, player monitoring, information provision, and age verification, must be implemented by operators like Svenska Spel. Notably, the SGA has issued fines and penalties to operators like Videoslots for neglecting to protect players from excessive gambling.
The concept of "duty of care" under Swedish law necessitates operators to act prudently to prevent gambling-related harm. However, recent court rulings have raised questions about the precise extent of this duty, prompting calls for clearer guidelines and strengthened responsible gambling standards from both operators and regulators.
The Swedish government is currently examining the Gambling Act to enhance enforcement mechanisms in response to criticism from the National Audit Office. The SGA is also investigating several licensed operators, including Svenska Spel, for possible rule violations. The post-decision market remains strict, with ongoing monitoring of both licensed and unlicensed operators, tax increases, and the closure of state-owned land-based casinos, all aimed at reducing gambling harm and bolstering consumer protection.
In light of the recent reversal of the Swedish Gambling Authority's decision against Svenska Spel, it is essential for the fintech industry, including financial institutions and business entities in the gambling sector, to pay close attention to Sweden's evolving gambling regulations. The clarification of the duty of care obligations under Swedish law will significantly impact fintech companies' responsibilities in preventing gambling-related harm and ensuring financial security.
