Swedish Trade Group Approves Of Higher Money Laundering Fine Proposal

September 12, 2023
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The Swedish online gambling trade group has said it approves of plans to increase fines for money laundering violations, but warned they should be based on gross revenue to be fair.
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The Swedish online gambling trade group has said it approves of plans to increase fines for money laundering violations, but warned they should be based on gross revenue to be fair.

Proposed changes to the Money Laundering Act put forward by the Swedish Ministry of Finance will see anti-money laundering (AML) violations treated at the same level as those in the Gambling Act, therefore increasing fines.

Gustaf Hoffstedt, secretary general of the Swedish Trade Association for Online Gambling (BOS), which represents 20 large operators, said: “There is no reason to downgrade AML violations along with other violations; on the contrary, these are among the most serious violations that can occur in the gambling market.

“BOS therefore approves the proposal, with the comments below as necessary additions.

"BOS cannot emphasise enough the importance that penalty charges for AML breaches, like breaches of the Gambling Act, should be based on the so-called GGR (gross gaming revenue), i.e. what remains in money after winnings have been paid out to the gambling consumers.

“This is also something that is emphasised in the Ministry of Finance's memorandum, which we welcome.”

Hoffstedt also highlighted other possible issues, including that fines and sanction fees should be set so that they keep to the financial stability and credibility of the gambling industry.

A government memorandum said: “The proposals in the memorandum aim to strengthen consumer protection in the field of gambling and combat criminal activity in connection with gambling for money.”

The changes to the law are proposed to come into force on April 1, 2024.

They follow a series of challenges by gambling firms against fines issued by the Swedish Gambling Authority (SGA) to operators. In a number of cases the fines have been lowered or nullified.

In May, the Supreme Administrative Court said fines should be based on gross gaming revenue (GGR), rather than annual turnover. It followed a SEK4m ($388,968) fine on gambling operator Genesis Global in March 2019 after an investigation found that it had failed to integrate its white-label brands into the self-exclusion system (Spelpaus).

Following the ruling, the SGA said it would have to “re-examine the issue of penalty fees” in the case.

Hoffstedt said at the time: “This decision is very welcome, albeit belated. That penalty fees should be based on GGR and not gross turnover should have been obvious from the start, since it is only GGR that the gambling company has at its disposal and can therefore use to pay any penalty fees.

"The rest of the money belongs to the gamblers and not the gambling company.”

BOS has campaigned on the issue as GGR can be as little as 10 percent of total turnover.

In June, an administrative court overturned a 2022 gambling authority fine against AB Trav & Galopp (ATG) for violations of Sweden’s money laundering laws.

The order nullified a SEK6m (€507,500) penalty levied in November 2022 against the horseracing betting specialist, as the court found that although ATG had not adequately assessed the risks of the gambling site being used for money laundering or terrorist financing, the violations were not shown to be “systematic or repeated”. 

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