Swedish Court Rejects XC Gaming Fine Appeal

September 30, 2021
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A Swedish court has rejected XC Gaming Sweden’s attempts to appeal a SEK5m (€490,000) fine imposed on it by the Swedish Gambling Authority last year, deeming the punishment that accompanied an official warning as “appropriate”.

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A Swedish court has rejected XC Gaming Sweden’s attempts to appeal a SEK5m (€490,000) fine imposed on it by the Swedish Gambling Authority (SGA) last year, deeming the punishment that accompanied an official warning as “appropriate”.

An administrative court appeal launched by XC Gaming Sweden last year was rejected in its entirety on September 21.

The SGA’s enforcement was published in November 2020, after the company was found to have violated bonus rules by sending gifts to a player it had already identified as being vulnerable.

Swedish legislation forbids operators from offering anything beyond a one-time welcome bonus offer.

The player was contacted by XC Gaming during the same period as the illegal bonus offerings over fears raised their escalated play could be a sign of problematic gambling behaviour.

The SGA deemed the company to be in breach of an operator's duty of care requirements.

XC Gaming Sweden’s appeal of the decision centred around the fact that the new owners, Mill Adventure, were not in charge of the company during the period under investigation.

In fact, the new management and current owners “had no knowledge or further information about gifts given”, according to the SGA decision.

Additionally, XC Gaming argued the gifts were given in early 2019 when it was still unclear how the bonus provision in the Gaming Act would be interpreted.

According to the SGA decision from last year, Mill Adventure was cooperative with the regulator as it wanted to show the company is now fully compliant with the Gaming Act.

Mill Adventure also announced that it would be taking special measures to ensure that the duty of care and gaming liability provision are also being complied with.

Regardless of this cooperation, the violations were considered to be “serious” by the SGA resulting in the fine and warning.

XC Gaming Sweden’s licence is valid until December 3, 2023, according to the SGA website, and covers the provision of games on websites www.frankfred.com and www.klirr.com.

The case highlights why the SGA found it necessary to clarify the rules around bonus offerings, as well recently issue new guidance for licensees' duty of care.

Gustaf Hoffstedt, the chief executive of Swedish trade group BOS, told VIXIO GamblingCompliance that his organisation welcomed the SGA guidelines regarding the duty of care.

However, BOS has taken a different stance in its “moderation in marketing” consultation response, submitted this week.

BOS said it rejects the proposed “austerity measures for gambling advertising”.

“The trump card of the Swedish-licensed gaming companies vis-à-vis the unlicensed has been the opportunity to market themselves and thus channel gaming consumers into the safe Swedish licensing system,” BOS said.

The government proposal would see gambling advertising go from being regulated on the basis of a “requirement for moderation” to “special moderation”, the way alcohol is treated in the country with very limited advertising opportunities.

BOS urged the government to withdraw the proposal.

Last week, the SGA confirmed it has not waivered in its support for the proposal.

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