Swedish Regulator Will Not Issue Umbrella Supplier Licence

February 22, 2023
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The Swedish Gambling Authority has said it will not issue umbrella licences or permits to online gaming suppliers, despite major concerns from industry stakeholders that this will be costly and time-consuming.

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The Swedish Gambling Authority (SGA) says it will not issue umbrella licences or permits to gaming suppliers despite major concerns from industry stakeholders that this will be costly and time-consuming.

The regulator clarified the situation to VIXIO GamblingCompliance, saying that the “legislation does not open up for that kind of permit” following the much-anticipated publication of a Q&A guidance memo regarding supplier licensing on Monday (February 20).

SGA investigator Josefin Aronsson explained that a “company that needs a permit for gambling software, and where there are several subsidiaries or other entities involved in the process of, e.g., manufacture of gambling software, cannot get a permit where all the subsidiaries are absorbed or included in the permit (a so-called umbrella licence)”.

However, the regulator added that “there are no different kinds of permits for gambling software, an applicant will apply for the same sort of permit whether the company manufactures, supplies, installs or adapts gambling software, or if the company does several of these activities".

This is not the same thing as an umbrella licence.

The SGA expects some of the non-independent parties that would have been absorbed in an umbrella licence to be affected by its interpretation of the term “manufacture” instead.

“A decisive factor regarding which one needs a permit in such a process depends on where the final control of the development of the product is located,” the SGA explained.

This means subsidiaries that manufacture gambling software on behalf of a permit holder, and where the permit holder retains control over the design and content of the final product and has ownership over the gambling software, “do not necessarily need to apply for a separate permit”.

The release of the Q&A comes just days after Swedish online trade group BOS sent a letter to the SGA demanding clarity on the availability of umbrella permits for online gambling suppliers.

The trade group is concerned that without an umbrella permit, the SGA will receive a “massive” amount of applications for permits, which will be costly and time-consuming for operators to provide and difficult for the regulator to monitor.

“If the legislature doesn’t allow an umbrella permit, well then brand it with another name but aim for the same goal. There must be a way to solve the problem," said Gustaf Hoffstedt, secretary general of the BOS.

"The important thing is to secure a successful implementation of the Swedish B2B permit system, and it cannot be a success without something that at least resembles umbrella permits,” Hoffstedt said.

The SGA has set the application fee at SEK120,000 (€10,900).

An annual monitoring fee will also be charged but it still has not yet been set.

The requirement for a software supplier's licence will come into force on July 1, 2023, and the SGA is expected to accept applications for the licence from March 1, 2023.

In other jurisdictions, such as the UK, the Gambling Commission has published information in the past entitled “When can a company operate under another’s licence?”, which provides guidance on the circumstances in which it will issue an “umbrella licence” for a group of companies.

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