Sweden hits Kindred with SEK100m penalty for bonus offers


sweden-kindred-group-penalty-online-gambling-bonusesOnline gambling operator Kindred Group has been hit with a record fine by Sweden’s gambling regulator for violating rules on bonus offers to customers.

On Wednesday, Sweden’s Spelinspektionen regulatory agency announced that Kindred’s Swedish subsidiary Spooniker Ltd had “offered several different unauthorized bonuses” to local gamblers, prompting the regulator to issue a warning and impose a penalty fee of SEK100m (US$9.7m).

The offending bonus offers were initially flagged by Spelinspektionen in March 2019, but the regulator’s followup checks in May and June uncovered additional bonus violations as well as evidence that Kindred’s gambling brands were offering lottery products not covered under the company’s Swedish license.

Sweden’s regulated online gambling market restricts bonus offers to first-time customers only. Kindred’s alleged shortcomings included free spins for online casino customers, free bingo games, rewards for playing poker and a bingo loyalty program, perks that Kindred viewed as ‘in-game mechanics’ due to their lack of financial incentives.

Spelinspektionen considers Kindred’s violations to be “serious” and strongly implied that it had considered revoking Kindred’s local license. However, Spelinspektionen said it “assumed” Kindred would refrain from future shenanigans of this sort, and thus a fine and a warning was “a sufficient intervention.”

The size of Kindred’s fine represents a new high since Sweden’s regulated online market launched in January 2019, vastly exceeding the SEK9m penalty imposed on Cherry AB’s Snabare (Faster) brand last August for offering wagers on sports events involving underage athletes.

The regulatory spanking applied to Kindred also stands in stark contrast to the simple warning Spelinspektionen issued to domestic state-run operator Aktiebolaget Trav och Galopp (ATG) last week for similar bonus violations. In that case, 15 customers were found to have received improper bonus offers and ATG self-reported the alleged software ‘glitch.’

Spelinspektionen justified the size of the Kindred fine by the number of violations it uncovered, the fact that they related to both bonus offers and unauthorized lotteries, as well as Spooniker’s “high turnover.” Sweden’s gambling laws allow Spelinspektionen to impose a maximum penalty equal to 10% of a licensee’s gambling turnover.

Kindred issued a statement on Wednesday saying Sweden’s new gambling regulations are “vague in areas related to commercial activities and thereby creating unnecessary ambiguity.” Kindred said it “initially made a different interpretation of what is considered a bonus” under Sweden’s rules, an interpretation that Spelinspektionen “has disputed.”

Kindred says it adopted “a more restrictive interpretation of the law” last spring, but the company plans to appeal its record Swedish penalty “to obtain judicial guidance on how the new legislation should be interpreted.”

Kindred’s shares on the Stockholm exchange are currently trading down around 3.5% to SEK23.90. The shares traded as high as SEK57.16 as recently as February 20, but have suffered along with most other gambling operators due to the impact of the COVID-19 pandemic.