In the world of digital gaming, compliance with industry regulations is paramount for maintaining fair and safe environments for consumers. It was recently reported that the Swedish gaming software provider Yggdrasil encountered a significant regulatory hurdle. Yggdrasil, which had received its software license on 22 March 2023, authorizing it to create, supply, and install gaming software for online ventures in Sweden, found itself in troubled waters with the Swedish regulator, Spelinspektionen. With this license set to expire on 20 June 2028, Yggdrasil is required to adhere to specific operational guidelines according to Sweden’s legal framework for gaming.
The regulatory body commenced an in-depth investigation on 16 January 2024, following concerns regarding unlicensed online gambling operations in Sweden. It was during this inquest that Spelinspektionen discovered that Yggdrasil had been associated with one of these unauthorized websites, breaching chapter 11, section 6 of the Swedish Gambling Act. This legislation expressly prohibits licensees from providing software to entities operating without appropriate licensing.
Upon being informed of the oversight, Yggdrasil promptly took action on 23 January 2024, rectifying the issue. The company acknowledged that a contractual breach with a retailer led to the violation and assured the regulator that it had ceased to “manufacture, supply, install or change gaming software for players without the necessary license.” The rapid course correction involved the removal of all Yggdrasil games and related assets from the unlicensed website, effectively halting the infringement.
The regulator, while recognizing Yggdrasil’s immediate compliance efforts, emphasized that the swift addressal of such issues is an expected standard of practice for all licensed entities. However, the underlying severity of the breach warranted further punitive measures. Spelinspektionen deemed the violation as severe, citing the risks such conduct poses to the integrity and oversight of the regulated gaming industry.
In considering the gravity of the infraction and the subsequent actions taken by Yggdrasil, Spelinspektionen concluded that a warning coupled with a monetary penalty was appropriate. The fee, legally bound to be at least SEK5,000 and limited to 10% of the company’s turnover based on the prior financial year, culminated in SEK300,000—a figure considerably below the potential maximum, in light of Yggdrasil’s 2023 net sales of €514,566 or approximately SEK5.8 million.
The gaming firm has remained silent on the matter following the public announcement of the warning and fine. This encounter with regulatory issues is not an isolated incident in the Swedish online gaming market. Spelinspektionen has been vigilant and active in its regulatory role, as demonstrated by the series of actions taken against other entities. In December, Spelinspektionen levied a SEK2 million fine on Casino Cosmopol for deficiencies in its anti-money laundering measures and concurrently issued a warning to Svenska Spel.
Moreover, November 2023 saw the Swedish regulator ban both Moonrail Limited and Perfect Storm for operating in the Swedish market without a license. In both instances, the firms were found to be targeting Swedish customers directly, with their marketing and terms and conditions conspicuously available in the Swedish language.
Through these regulatory measures, Spelinspektionen sends a stern message to the online gaming industry, asserting its commitment to an orderly and secure market. The repercussions faced by Yggdrasil serve as a reminder to all licensed operators to consistently and meticulously abide by the law, or face the consequences of non-compliance. The Swedish regulator remains poised to enforce these standards to protect players and maintain the integrity of the gaming ecosystem.
