The Swedish gambling regulator, Spelinspektionen, has taken stringent action against several operators discovered to be organizing unauthorized online gambling services targeting Swedish consumers. Among these are Newera Frozen PTE Limited and Aprodi Limited, which were found to be conducting illegal “skin” lotteries tailored for the Swedish gaming community.
These particular lotteries permitted participants to wager digital items known as ‘skins’, commonly collected in video games and which possess a real-world monetary value. Skins can be bought and sold both within and outside their associated gaming platforms, creating a market which the operators tapped into for their gambling activities.
Spelinspektionen identified Newera Frozen PTE Limited as the entity behind the website hellcase.com, while attributing key-drop.com’s operations to Aprodi Limited. Both websites were found to offer various gambling modes centered on the use of skins. One notable mode involved players betting a skin with the chance of securing another of higher value.
Marketing for these websites predominantly occurred on video platforms, notably YouTube and Twitch, involving user-generated content. This means that while the operators commissioned these promotional materials, there was no direct oversight or control over the content.
The Swedish regulator delineated the factors it considers when classifying whether content targets Swedish players. These include the presence of Swedish language information, usage of .se domains, integration with Swedish e-identification or payment services, and marketing materials in Swedish disseminated by affiliates.
In the case of hellcase.com and key-drop.com, Spelinspektionen unveiled information presented in Swedish on both platforms. The FAQ section of hellcase.com was in Swedish, and the site had engaged the services of a Swedish payment processor. Similarly, key-drop.com had terms and conditions as well as affiliate marketing material in Swedish.
In response to the investigation, Newera Frozen PTE Limited contended that it was selling loot boxes, which they argued should not be categorized as gambling, thus negating the need for a gambling license. Subsequent to the probe, they removed all Swedish text and discontinued their Trustly payment service.
After examining the operations of both entities, Spelinspektionen concluded that the Swedish Gambling Act should apply to any games where winnings have an economic value. It specified that the ‘skins’ sold on the websites are of monetary value, hence the Gambling Act is applicable to these gaming operations.
In addition to these two operators, the regulatory body imposed a ban on Galaktika NV, an unlicensed operator running drip.casino. Galaktika NV, which operates multiple sites including jet.casino, fresh.casino, and monro.casino, is registered in Curaçao. The Swedish regulator’s investigation into drip.casino revealed Swedish language affiliate marketing. Galaktika NV retorted by saying that it did not intentionally target Swedish customers and that it outsourced its marketing to third parties focusing on the European market in general.
However, the final decision by Spelinspektionen was that Galaktika NV had breached chapter 3, section 3 of the Gambling Act which mandates that a license is essential for anyone offering gambling services in Sweden. The regulator emphasized that Galaktika NV was effectively targeting the Swedish market through affiliates marketing to Swedish consumers, leading to the verdict that Galaktika NV should be banned from providing gambling services in Sweden due to the absence of a license.
These rulings follow on the heels of two significant fines levied by Spelinspektionen in recent weeks. Earlier, the regulator imposed a hefty fine of SEK100m on Svenska Spel Sport & Casino for purportedly failing to implement adequate measures to prevent harmful gambling and for not carrying out satisfactory player safety checks. The probe into Svenska Spel Sport & Casino occurred from October to December 2021.
Furthermore, game developer Yggdrasil was penalized with a fee of SEK300,000 for the alleged provision of software to a company unlicensed to operate in Sweden, showcasing Spelinspektionen’s commitment to rigorously enforcing the provisions of the Swedish Gambling Act.
