Spelinspektionen gave Zimpler until 31 July to cease providing payment services containing BankID to operators without a licence.
Should Zimpler fail to comply with the order, the regulator said that it would issue a fine of SEK25.0m (£1.8m/€2.1m/$2.3m).
“Swedish gambling regulations are based on the fact that everyone who operates in the market must have a licence and those without a licence must be shut out,” Spelinspektionen said. “The aim is for all gambling to be channelled to offers from responsible, reliable and controllable operators.
“Since 1 January, it is not permitted to promote participation in games that are provided without the necessary licence in professional activities or otherwise for gainful purposes.”
Regulatory decision
In its injunction ruling, Spelinspektionen said the decision to take action against Zimpler was based on the provider’s use of BankID in transactions with unlicensed operators. BankID is an e-identification service that is only used by customers in Sweden.
According to Spelinspektionen, the use of BankID in the transactions proved the operators in question were illegally targeting Swedish players. The regulator did not disclose the identity of any of the operators involved, but it said it launched an investigation after an anonymous tip.
In its response to the case, Zimpler said it did not believe its actions to be in breach of law in Sweden. However, it also said it would terminate its relationships with unlicensed websites that accept Swedish customers.
Zimpler stated it has already begun this process and aims to conclude the withdrawal of services by the third quarter at the latest.
Zimpler responds
However, the provider also said it was not aware the operators lacked the relevant licence. Zimpler said it is a question of overall assessment as to whether individual sites are designed to target Swedish players.
Zimpler added that none of its customers can be found on Spelinspektionen’s list of brands that it deems to be illegally targeting the Swedish market.
“The payment service solutions that Zimpler provides to these customers are not specifically adapted for gaming companies, but are provided to all customers in all segments,” Zimpler said in its response. “The payment service solutions must therefore be seen as a normal payment task.
“As part of its process for approving new customers, Zimpler takes a large number of measures to ensure regulatory compliance. We have the right to terminate a business relationship if anything comes to light that indicates that the customer is targeting Sweden without a Swedish licence.”
However, Spelinspektionen said it was clear Zimpler has a close collaboration with operators that do not have a licence, but which target the Swedish market. It said these companies use Zimpler’s payment service solutions in the Swedish market and, as such, Zimpler promoted unlicensed activity.
Concerns over unlicensed operators
The ruling comes after a report by Sweden’s Online Gaming Industry Association (BOS) revealed 77% of Sweden’s online gaming market is channelised. This, the BOS said, was “critically low” and called for action to be taken.
Sweden’s channelisation goal – the percentage of licensed gaming offerings that it wishes to have on the market – is currently set at 90%.
Gustaf Hoffstedt, secretary-general at BOS, said there is “no doubt” the Swedish licensing system is in a serious situation.
“Far too much power has been spent on the part of the state to force the licensed gambling companies to implement measures that have not been well received by gambling consumers,” Hoffstedt said.
Extra powers
To help combat illegal activity, the Swedish government handed Spelinspektionen a range of new measures .
The changes primarily related to payment providers and Spelinspektionen’s regulatory powers in this area. Payment providers must now submit certain information to Spelinspektionen.
Information now required includes details on whether their systems are being used to process payments to and from unlicensed operators in Sweden.
At the time, the government said that the changes would enable a more efficient system for blocking payments. It also said this would allow the regulator and payment providers to work together to combat unlicensed gambling.
Earlier this month, Spelinspektionen also began to obligate owners of supplier licences to pay fees. Effective from 1 July, Spelinspektionen charges a fixed fee to the organisation that holds a licence to supply gaming software to operators in Sweden.
The regulator requires businesses to pay a separate fee for each licence it holds unless it receives a specific exemption.
Also last month, it was announced Swedish lawmakers will consider a proposal to increase penalty fees for gambling operators that breach the country’s Money Laundering Act.
If approved, the proposal would adjust penalties to the same maximum amount for violations of the Gambling Act.
Original article: https://igamingbusiness.com/legal-compliance/legal/zimpler-fine-illegal-sweden/
