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Swedish regulator calls for more clarity on proposed ban of credit-based gambling

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The Swedish regulator Spelinspektionen declared support for the proposed ban of gambling on credit cards, but called for more clarity in regards to new rules and regulations.

Under the Gambling Act, licensed operators are prohibited from offering or supplying credit. According to plans announced by the Ministry of Finance in February, this expanded ban will be even more comprehensive.

The proposals outline that state operators or gambling agents will not be allowed to accept deposits and bets funded by credit. It doesn’t matter how or when the credit was provided.

The focus is on the requirement that licensees have duty of care to discourage excessive gambling. Spelinspektionen was proposed as the authority to determine what should be in these plans.

Sticking points for Spelinspektionen on potential ban

Spelinspektionen has published its response in which it says that the majority of their support is for this ban. The regulator had called for the ban of gambling with credit cards in November, last year.

Spelinspektionen has raised several concerns with current plans and asked that they be clarified.

It is noted that certain non-profit organizations, like those who sell bingo or lottery games, are not allowed to accept bank cards. The ban does not apply to them.

Spelinspektionen says that public lotteries sell their tickets through digital channels. It calls on measures to prevent payment by credit cards or financing with credit from a third-party for these tickets.

It said that “the memorandum does not contain an analysis of the possible consequences this may have for public benefit lottery games.”

Swedish regulators are concerned about “ambiguity”

It also raised concerns about “ambiguity” with respect to the rules proposed. It says that the issue is primarily about how to interpret “credit”.

The current proposals call for a longer credit restriction on the use of account credits by consumers to gamble. Spelinspektionen explained that credit tied to a bank is account credit.

The regulator has said that this could be taken to mean licence holders or gambling agents must ensure that a credit area isn’t used for debit card payments. The proposals, however, do not include any investigative duties on the part of licensees and agents. The regulator claims that the proposed rules are not sufficient to require payees to check the credit limit of a debit card with each purchase.

Spelinspektionen also says that the proposals don’t specify whether agents and licensees must implement technical solutions, or sign agreements with payment providers in order to prevent payment through credit facilities linked to debit cards.

It said: “Spelinspektionen interprets this proposal to mean that licence holders and agents cannot allow such payments if the payer can discover, without any special investigation measures, that payment was made using a credit.” The payee must know, for whatever reason, that the bet was funded by a credit.

The scope of proposed ban on debit cards for credit could be clarified, given the above reasons.

Sweden is set to ban credit cards, following the rest of Europe.

If Sweden were to implement the ban as planned, it would be following other major markets.

In April 2020, the UK banned using credit cards for gambling. The Gambling Commission found that the ban was implemented smoothly and without “unintended consequence”.

The Interactive Gambling Amendment Bill 2020 will be introduced by the Australian government in September 2023. This bill was primarily focused on banning the use of credit card.

Norway, another Nordic cousin of Sweden, also has a ban on credit card gambling. Brazil, a country further away, has also banned the use of credit cards or cryptocurrency for gambling.

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