Home NewsTechnology Zimpler fined SEK25m for illegal gambling promotion in Sweden

Zimpler fined SEK25m for illegal gambling promotion in Sweden

by Bela Ksovreli
Published: Last Updated on 140 views 4 minutes read

The Swedish regulator Spelinspektionen warned Swedish payment provider Zimpler it would face heavy fines if they did not stop their activities with non-licensed operators.

Spelinspektionen has given Zimpler until the 31st of July to stop providing payment services that include BankID for operators who do not have a license.

Should Zimpler fail to comply with the order, the regulator said that it would issue a fine of SEK25.0m (PS1.8m/EUR2.1m/$2.3m).

Spelinspektionen stated that “Swedish Gambling Regulations are based upon the fact everyone operating on the market needs to have a license and those who do not need a permit must be excluded.” The goal is to channel all gambling towards offers by operators who are reliable, trustworthy and under control.

Since 1 January it’s illegal to use games provided by unlicensed providers in the context of professional or other gainful activities.

Regulation decision

Spelinspektionen stated in its ruling that the use of BankID by Zimpler in transactions with non-licensed operators was the reason for the action taken against the company. BankID, an electronic identification service used only by Swedish customers, is a part of the Spelinspektionen injunction ruling.

Spelinspektionen claims that the fact the transaction involved BankID proved operators were targeting Swedish players illegally. Spelinspektionen did not reveal the identities of the operators, but said that it had launched an investigation following an anonymous tip.

Zimpler responded to the lawsuit by saying that it does not consider its actions as a violation of Swedish law. It also announced that it would end its relationship with websites without licenses which accept Swedish clients.

Zimpler has stated that it is already in the process of removing services and hopes to complete the procedure by the end of the third quarter.

Zimpler responds

The provider said that it did not know the operators were lacking the required licence. Zimpler stated that it was a matter of assessing whether or not the sites were designed with Swedish players in mind.

Zimpler said that its brand is not on the list that Spelinspektionen has compiled of companies that are deemed to be targeting illegally the Swedish market.

Zimpler responded that the payment services it provides aren’t specifically tailored for gaming companies but they are available to customers of all sectors. The payment services solutions should be viewed as normal payments.

Zimpler, as part of the process of approving new clients, takes many measures to ensure compliance with regulatory requirements. If we find out that a customer has been targeting Sweden, but without the Swedish license required to do so, then Zimpler can terminate the business relationship.

Spelinspektionen, however, said that it is clear Zimpler works closely with operators who do not hold a license but target the Swedish Market. The report said that these companies used Zimpler payment services on the Swedish market, and as such Zimpler was promoting unlicensed activities.

Unlicensed operators are a concern

This ruling follows a report from Sweden’s Online Gaming Industry Association, which revealed that 77% of Sweden’s online gaming market was channelled. The BOS called this “critically low”, and demanded that action be taken.

Sweden has set a 90 percent channelisation target – the number of licensed games it wants to offer on the market.

Gustaf Hoffstedt said that there was “no question” about the seriousness of the Swedish licensing situation.

Hoffstedt stated that “far too much state power was used to force licensed gambling firms to adopt measures which were not well-received by the gambling consumer.”

Additional Power

Spelinspektionen has been given a number of new tools to help fight illegal activities.

Spelinspektionen has regulatory power in the payment provider area. Spelinspektionen now requires payment providers to submit specific information.

The information now needed includes details about whether or not their systems have been used to pay and receive payments from non-licensed operators.

The government claimed that these changes would allow for a better system of blocking payments. The government also stated that this change would enable the regulator to collaborate with payment providers in order to fight unlicensed gaming.

Spelinspektionen began requiring owners of licences for suppliers to pay fees earlier this month. Spelinspektionen will charge a fee of a certain amount to any organisation with a license to provide gaming software in Sweden.

Businesses must pay separate fees for every licence they hold unless there is a special exemption.

Last month it was also announced that Swedish legislators will be considering a proposal for increased penalties against gambling operators who violate the Money Laundering Act of Sweden.

The proposal, if approved, would increase the maximum penalty for gambling violations to the same amount.

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