Sweden gambling regulator seeks higher money laundering fines


sweden-gambling-money-laundering-penaltiesSweden’s gambling regulator is closing out the year by seeking the ability to impose stiffer fines on companies that violate anti-money laundering (AML) regulations.

On Friday, Sweden’s Spelinspektionen regulatory body said it had asked the Ministry of Finance to rewrite rules regarding the maximum penalty it’s allowed to impose on AML laggards. Spelinspektionen said the current maximum penalty of €1m is too low and it needs to be able to impose penalties that are “effective, proportionate and dissuasive.”

Spelinspektionen noted that many of its online gambling licensees “turn over large amounts and have a strong financial position.” Sweden’s largest licensees reported turnover of hundreds of millions of euros during the first nine months of 2019, which in Spelinspektionen’s view makes a €1m penalty “not sufficiently noticeable.”

Spelinspektionen wants to harmonize the AML penalty rules with those for violating the Gaming Act, i.e. a maximum fine of 10% of a licensee’s turnover in the previous fiscal year.

In November 2018, Spelinspektionen imposed an SEK8m (€768k) penalty on Svenska Spel’s Casino Cosmopol division for “serious and systematic” AML shortcomings, but this fine was reduced to SEK3m after Svenska Spel appealed the fine to the Administrative Court of Linköping.

This week, Spelinspektionen’s enforcement arm was once again undermined by the Linkoping court, which declared that the penalties imposed on online casino licensees Aspire Global and Genesis Global this spring were too high.

The two firms were accused of failing to strictly screen customers’ names to ensure they weren’t listed on the country’s Spelpaus gambling self-exclusion registry. Genesis Global was hit with a SEK4m penalty while Aspire was ordered to pay SEK3m.

This week, the court upheld Spelinspektionen’s right to impose the penalties but ruled that the regulator had overestimated the size of the penalized companies’ operations. Spelinspektionen wasn’t eager to publicize how great a reduction the court allowed but Aspire’s CEO told local media that his company’s penalty was reduced by SEK1m.

It’s perhaps worth noting that, while Spelinspektionen has been doling out fines left, right and center to its online licensees since the regulated market’s launch this January, only one penalized firm (Paf) has actually paid up, possibly because the fine was only SEK100k (€9,600).

Sweden’s regulatory crackdown doesn’t seem to be dissuading new operators from pursuing local licenses. Spelinspektionen announced Thursday that low-margin sportsbook operator Pinnacle had secured a license for its Pinbet (Sweden) Ltd offshoot, which is authorized to offer sports betting via three domains: Pinnacle.bet, Pinnacle.se and Pinnaclesports.se. Pinnacle’s arrival makes 95 companies with active Swedish licenses, including 68 for online betting and gaming.