Yggdrasil Receives Sweden's First Fine For Supplying A Banned Operator

March 26, 2024
The Swedish Gambling Authority has issued its first fine for supplying an unlicensed operator on the country’s prohibition list to Yggdrasil Gaming.

The Swedish Gambling Authority (SGA) has issued its first fine for supplying an unlicensed operator on the country’s prohibition list to Yggdrasil Gaming.

Yggdrasil received a SEK300,000 (€26,194) penalty fee and a warning from the SGA, according to an announcement on March 25. 

A spokesperson for the SGA explained that the purpose of the supplier licence is to increase the channelisation rate to counteract illegal gambling. 

“Unlicensed gaming operators should not be able to use suppliers that manufacture, provide, install, and/or modify gaming software for gaming operators licensed in Sweden,” the SGA told Vixio GamblingCompliance. 

The SGA confirmed to Vixio that the banned operator in question is Indigo Soft N.V.

Since July 1, 2023, companies supplying Swedish gambling operators have been required to hold one or more licences offered by the SGA.

On October 26, 2023, the SGA sent letters to all licensed suppliers reminding them that they may not manufacture, provide, install or change game software for players without the necessary licence and warned it would be monitoring their supply of games.

The SGA then began to search prohibited operator websites on January 16, 2024, during which Yggdrasil’s games were found on the banned website. 

Yggdrasil responded to the SGA’s findings on January 24, informing the SGA that it took corrective action and that the reason the games were available was due to a breach of contract between itself and a retailer.

The SGA concluded: “It is the person who has the permit who is responsible for ensuring that game software is not provided to players without the necessary licence, regardless of whether an agreement has been signed with another party.”

Yggdrasil also told the SGA that its “internal flaws” with monitoring of dealer agreements caused the violation. 

Gustaf Hoffstedt, director general of the online trade group BOS, said he believes “licensees and permit holders do not intentionally want to make mistakes, but sometimes they do anyway”.

“It is often due to the fact that it is a co-partner who has made a mistake rather than the licence or permit holder itself. We are keen that all B2B suppliers do their utmost to defend the Swedish licensing system by not providing operators on the SGA blacklist with gaming software,” Hoffstedt said. 

Maria Wennerberg Sedigh, CEO of the National Gaming Industry Association (SPER), whose members include state-owned Svenska Spel, said it is pleased that the SGA “is prioritising their work to reduce unlicensed operators”.

“Unlicensed gambling is a challenge for both the industry and the consumer. We need a regulation that prevents gambling companies without a licence from offering games in Sweden,” Sedigh told Vixio.

Mitigating circumstances taken into account by the SGA when issuing its punishment included the supplier quickly taking action to remove the game and cooperating fully.

However, “the mitigating circumstances do not outweigh the seriousness of the offence in such a way that it can be considered minor or excusable”, according to the judgment. 

Under Sweden’s Gambling Act, suppliers can receive a warning, fines, a change to their licence conditions or even have their licence revoked if the violation is deemed serious enough. 

Despite Yggdrasil’s violation being deemed serious, the SGA determined that a warning would be sufficient. But as the violation is not “minor or excusable” a penalty fee must also be paid. 

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