The Swedish government is looking to simplify existing gambling payment-blocking rules in a bid to strengthen controls to prevent consumers from playing with unlicensed operators online.
The European Commission received a legal proposal submitted by the Swedish government on January 30, 2023. It follows a bill to amend the Gambling Act submitted to the Swedish parliament for consideration on December 20, 2022. The amendments are proposed to enter into force on July 1, 2023.
“The proposals aim to increase protection for the players and exclude such unlicensed gambling activities that, in violation of the Gambling Act, target Swedish consumers,” according to the commission submission.
Under the changes, payment providers will be required to reject payment orders using the retail Merchant Category Code (MCC) 7995, which is used to identify gambling firms, unless “the payment order relates to a business that has a license according to the Gaming Act or where such licence is not even required”, the proposal states.
A spokesperson for the Swedish Gambling Authority (SGA) said the regulator is “positive” about the proposed changes.
“We hope that the changes will lead to a more efficient and simpler process around preventing payments to illegal actors,” the SGA told VIXIO GamblingCompliance.
In the current regulation, there are more detailed provisions on the obligation to provide information regarding payment mediation for unlicensed gambling and companies that promote illegal gambling in violation of the Gambling Act.
The SGA also clarified that, according to the current regulations, the regulator “is able to apply for payment blocking of a certain account with the administrative court. It is the administrative court that decides whether to order a certain payment service provider to block the account.”
Gustaf Hoffstedt, secretary general of online Swedish trade group BOS, explained that Sweden currently has a “non-protectionist licensing system” that allows all gambling companies that meet the state's requirements for consumer protection and anti-money laundering measures to operate in the gambling market.
“The conditions in Sweden are decent. There are therefore no legitimate reasons to circumvent the Swedish legislation and target Swedish gambling consumers despite the lack of a Swedish gambling licence," Hoffstedt said.
However, the head of the trade group added that "consequently, we welcome that the government wants to take action against the payment providers who offer their services to gambling companies on the Swedish gambling market despite the lack of a Swedish licence".