Danish Supplier Licensing Turns Spotlight On Aggregators

June 19, 2024
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Aggregators may need to apply for supplier licences in Denmark if they have compliance oversight for the games they supply, as the industry prepares for a new 2025 regulatory regime.
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Aggregators may need to apply for supplier licences in Denmark if they have compliance oversight for the games they supply, as the industry prepares for a new 2025 regulatory regime.

From January 1 next year, many of the companies that supply operators licensed in the Danish market will need to have their own licences issued by the Danish Gambling Authority (DGA).

Applications will open on September 1, with both sportsbook and casino content suppliers required to apply.

However, the role of aggregators, which have been the nexus of enforcement action in neighbouring Sweden, looks set to occupy a grey area that could again prove problematic.

Aggregators, which collect offerings from a variety of game creators and re-sell the content to operators in an effort to simplify the supply process, may be required to acquire a licence in Denmark, but only if they have “legal responsibility” for the games they sell to the market.

In a Q&A sent to prospective supplier licence-holders, the DGA said: “An aggregator needs a licence if the aggregator takes on the legal responsibility in regards to compliance and certification obligations for the games. 

“If the aggregator is only a distribution channel and the aggregator has no legal responsibility in regards to compliance and certification, then the underlying supplier (who is using the aggregator as a distribution channel) needs the licence.”

The world of supplier licensing is relatively unexplored globally, but is fast becoming the trend in Europe. The somewhat nebulous role of aggregators and other third-party links in the supply chain have caused complications.

In Sweden, which has enforced supplier licensing since the start of this year, licence-holders that were recently fined blamed the lack of compliance on their third-party partners.

Both suppliers were fined after the regulator discovered that content they created was being used by operators targeting Sweden without a licence.

Hacksaw Studios tried to combat its SEK2.6m (€226,000) fine by arguing that “a developer cannot take full responsibility for its customer's regulatory compliance”.

Panda Bluemoon meanwhile blamed its distribution partner for breaching the terms of its contract in protesting its SEK700,000 (€61,000) penalty.

These complaints fell on deaf ears, with the Swedish Gambling Authority stating bluntly that compliance responsibility rests solely with the licence-holder and it is up to these companies to monitor what happens to their content after they create it.

The situation recalls the dynamic between operators and affiliates in the UK several years ago, when licence-holding gambling operators were subjected to an enforcement blitz from the Gambling Commission over infractions by their marketing partners.

The campaign prompted a rewiring of the affiliate/operator relationship in the UK and beyond.

The growth of supplier licensing worldwide and the diffused nature of the content supply chain threatens to create a similar reckoning.

Elsewhere in its Q&A, the DGA clarified that multiple legal entities within the same company would all need individual licences if they are involved in the supply of casino or sportsbook content.

However, it said that if a company with an existing operator licence creates content for its own use then it does not need to also apply for a supplier licence.

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