In a notable development in Sweden’s burgeoning gambling industry, the Court of Appeal has amended a significant penalty fee that was originally levied against casino operator Mr Green. On Monday, May 27, the court ruled that the Swedish gaming regulator Spelinspektionen had acted proportionately when it initially imposed a SEK31.5 million penalty against Mr Green in August 2021. However, citing alignment with the Supreme Administrative Court’s guiding principles, the penalty was subsequently reduced to SEK12 million.
The penalty originally broke down into two component parts: SEK1.5 million was attributed to lapses in anti-money laundering (AML) procedures, while a hefty SEK30 million was levied for failures related to customer duty of care. Upon appeal, the Court of Appeal found it justified to reduce the penalty fee while still agreeing with the regulator’s initial determination that Mr Green had violated pertinent regulations.
“The Court of Appeal considers that the penalty fee that the Swedish Gaming Authority now advocates is proportionate, and the court therefore decides that the penalty fee should be set at this amount,” stated the ruling.
The legal wrangle began when Mr Green contested the original SEK31.5 million penalty and an accompanying warning at the Administrative Court in Linköping. In this initial hearing, it was determined that Mr Green had deficient AML protocols and had contravened the Money Laundering Act with respect to customer due diligence obligations. Consequently, the Administrative Court upheld both the financial penalty and the warning.
Complaints about Mr Green’s AML policies began pouring into Spelinspektionen in November 2019, prompting a regulatory review of the operator’s policies. Scrutiny fell on 15 specific player accounts, revealing that Mr Green had preemptively reported some of these cases to Sweden’s financial police, suggesting an existing suspicion of money laundering activities.
In one particularly concerning incident, a customer deposited SEK39.3 million and lost SEK3.2 million, despite having only declared a yearly income that marginally covered the loss. When this customer ceased playing, Mr Green failed to conduct any further investigation into potential money laundering, prompting regulatory concern.
Another troubling case involved a customer making numerous daily deposits and accruing losses that far exceeded their declared taxable income over several years.
. The regulator noted that this individual was more likely suffering from gambling-related harm than laundering money. This customer’s account, along with several others, was eventually terminated in 2020.
Spelinspektionen also highlighted Mr Green’s lack of communication with customers who had substantial deposit limits exceeding SEK100,000, emphasizing the need for stringent customer care protocols in preventing gambling-related harm and financial abuse.
Mr Green’s case unfolds against a backdrop of heightened regulatory actions within Sweden’s competitive gambling market. This month has already witnessed substantial penalties and warnings issued to other industry players. Earlier in the week, content providers Hacksaw Gaming and Panda Bluemoon faced significant scrutiny for supplying unlicensed sites. Hacksaw Gaming was hit with a SEK2.6 million fee, while Panda Bluemoon incurred a SEK700,000 penalty.
Another notable case saw the Administrative Court of Appeal in Jönköping reduce a historic fine against Kindred Group’s subsidiary Spooniker for the second time. Initially set at SEK100 million in March 2020, the fine now stands at SEK30 million after being previously reduced to SEK50 million in 2021. Spooniker faced allegations of offering unauthorized bonuses and conducting lotteries without appropriate licenses.
The series of enforcement actions underscores Spelinspektionen’s commitment to maintaining robust standards within Sweden’s regulated gambling market. Operators are increasingly held accountable for compliance with stringent legal and ethical standards.
As the regulatory landscape intensifies, the reduction in Mr Green’s fine highlights the nuanced balance that courts seek in ensuring penalties are proportionate to the infractions while enforcing compliance. This pivotal ruling puts operators on notice, signaling that while penalties can be contested, lapses in regulatory adherence and duty of care will not go unchecked.
In conclusion, the Swedish Court of Appeal’s decision to reduce Mr Green’s penalty fee from SEK31.5 million to SEK12 million reflects a pragmatic approach to regulation, aligning with legal precedents and ensuring proportionality. This serves as a clarion call for the broader gambling industry, reinforcing the critical need for rigorous compliance and responsible gambling practices.
