Administrative Court Rules Against the Swedish Gaming Authority

Despite being founded upon one of the most well-constructed online gambling regulatory frameworks, the Swedish Gambling Authority has taken losses and received its fair share of criticism in 2023.

The most recent of these saw them lose a critical court case that could open the door for future transgressors to take their chance in front of a judge rather than capitulating to the fines and restrictions dictated by the regulator.

 Gambling Authority Lays Down the Law

November 2021 saw AB Trav & Galopp (ATG) face scrutiny from the Swedish Gaming Authority based on concerns over its money laundering and the financing of terrorism measures. The regulator performed an intensive review of the operator's AML activities from 2019 to 2021 and found it lacking in several key areas.

The Swedish Gaming Authority said:

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“The Gambling Inspectorate assessed that it is a question of violations that are both serious and systematic, and therefore decided to issue ATG with a warning and a penalty fee of SEK 6 million.”

While ATG was found to be compliant regarding customer risk profiles, managing customer awareness measures and internal routines aligned with the current Money Laundering Act. However, the organisation fell short in risk assessment, player review processes, and the efficacy of its customer awareness survey.

The inspectorate did a spot check on thirteen customer accounts and found that in eight cases, the operator had not “worked proactively and risk-based enough to be able to ensure that customer knowledge is up-to-date”, which would make them unable to effectively “assess and counter the risk of the company being used for money laundering and terrorist financing”.

 Administrative Courts Deny The Findings

Rather than admit fault by paying the SEK 6 million (€504,000) penalty, ATG appealed to the Swedish Administrative Court.

According to reports on the case, the courts did find that ATG had been less than effective in the following areas of responsibility:

• One account had no customer awareness checks performed on it.
• Tax and other financial information should have been included in several cases.
• Insight checks were taking place too long after large deposits.

While these and other noted failures qualify as "violations of the Money Laundering Act”, the courts did the unexpected and ruled against the Gaming Authority!

The official court response noted:

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“These deficiencies are such that they constitute violations of the Money Laundering Act. However, the administrative court considers that it has not been shown that the violations are systematic or repeated.”

It was also found that in addition to not being an ongoing problem, the severity of each failure was not “so serious as to warrant a warning and a penalty fee”.