Swedish Regulator Dealt a Gambling Licensing Loss by Courts

The online gambling sector has not been one to recklessly dive into litigation to the precedents that a loss or victory creates in the region. Despite having a well-constructed licensing regime, the Swedish gambling authority (Spelinspektionen) faced its first significant loss earlier this month when a local court overruled its license renewal rejection.

  Proof That Gambling Authorities Word is Not Final

In 2019 Avento was granted a three-year gambling license by Spelinspektionen, which came up for renewal in December 2022. The company, which owns and operates multiple online casinos, including the popular Frank Casino, had their renewal request denied, with the gambling authority citing “negative equity” as the reason.

The regulator assumed that Avento could not honour its licensing and player payout commitments due to its liquidity constraints. However, Avento took the regulator to court, arguing that the business had turned its fortunes around and could service all its agreements.

The Administrative Court in Linköping found in favour of Avento earlier this month. The ruling supported the operator’s assertions that it was in a good financial position and met the legal requirements to offer games of chance like online slots, live casino games, and table games in Sweden.

Swedish Gambling Licenses Up for Renewal in 2023

The loss does not come at a good time, as Sweden's first round of official gambling sites will submit renewal applications later this year. Swedish licensing came into force on 1 January 2019, and with all approved casinos receiving five-year agreements, renewals will need to be lodged before the 31 December expiry date.

Despite the legal loss, the regulator said:

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“For applicants who are part of a group, in some cases, the group’s combined capital strength can be taken into account. This applies to both first-time applications and applications for renewed licences.”

One of the issues with the Avento application was that some of its funding was being provided by an individual, which they do not feel is a secure asset.

They commented on this, saying:

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“The Swedish Gaming Authority believes that a capital guarantee from a private person cannot be accepted as a starting point in view of the difficulties in obtaining a reliable picture of a natural person’s financial position.”

While the gambling authority is standing its ground, the fact remains that should any other operator fail their renewal application on these grounds, they now have a legal precedent which will overrule Spelinspektionen’s decision.