Gaming Law 2019

Last Updated November 25, 2019

Sweden

Law and Practice

Author



Nordic Gambling is the only legal firm with established offices in both Denmark and Sweden which specialises in gambling-related law. The firm has extensive experience in the industry, working with operators, suppliers, service providers and government regulators.  It has been closely involved in the development of the law and regulation in a number of European jurisdictions, including Denmark and Sweden. The five-strong team is qualified to assist in any matter related to gambling, including licensing, compliance advice and public affairs. It also advises on areas closely related to gambling, including anti-money laundering, data protection, marketing, sponsorship, etc.

A new Swedish Gambling Act (2018:1138) entered into force on 1 January 2019 and, since then, any gambling operator satisfying the suitability criteria set out in the Gambling Act is able to apply for and be granted licences to offer online commercial gambling and/or betting to Swedish consumers.

Since the Gambling Act is so new, no revolutionary developments are expected in the near future. However, it should be noted that the timeframe during which the new Gambling Act and its secondary legislation were implemented was very short, which meant that not all aspects of the new framework could be sufficiently investigated or analysed. Therefore, the Swedish government has commenced an investigation to analyse the new conditions for sports and horse organisations following the re-regulation. A potential financing model to compensate sports for the provision of betting on their events is being considered, alongside what other measures should be taken to strengthen the Swedish gambling regulations. The instructions from the government also include an assessment of Svenska Spel and its adaption to the new laws, as well as an assessment on how to further counteract any harm caused by gambling. Following an extensive debate regarding the marketing of gambling services, in April 2019 the Swedish Minister for Public Administration decided to include additional directives to the investigation concerning how the marketing of gambling services can be further restricted. The result and proposal from the investigator shall be presented on 31 October 2020 at the latest.

The Swedish Gambling Authority (hereinafter referred to as the SGA) is also looking to issue new regulations on betting, and these are expected to include further restrictions related to licence holders’ betting offers. Draft regulations are likely to be made subject to a public consultation during autumn 2019. The SGA also plans to update its existing regulations on licence applications (LIFS 2018:1).

The new Gambling Act represents a complete overhaul of the legislative framework in Sweden regarding gambling and betting.  Previously, only two monopolies – Svenska Spel and AB Trav & Galopp (ATG) – and certain non-profit organisations were allowed to operate gambling services.

Prior to 1 January 2019, international operators acted in Sweden on the basis of licences held in other jurisdictions, leading to the creation of a grey market. However, since the re-regulation, the SGA has approved more than 80 companies (excluding non-for-profit organisations) as licence holders. A majority of the licences issued concern online commercial gambling and betting. Approximately 30 more licences are currently being assessed by the SGA. 

Products available under an online commercial gambling licence include online casino (table) games, online slot machines and online bingo, as well as ancillary lottery games. Traditional lottery products are reserved to the state and charity organisations.

Under a betting licence, both land-based and online betting may be provided. In addition to traditional sports betting, betting mayinclude betting on fantasy sports, betting exchange, betting on virtual events and, with some restrictions, betting on the outcome of a lottery. Ancillary lottery games may also be provided under certain circumstances. However, betting licences may not cover betting on occasions where the majority of the participants are under 18 years of age, spread betting nor betting on events or occasions that may be perceived as offensive or, from the perspective of the public, inappropriate.

Fantasy sports may be regarded either as a game of chance (and therefore fall under the Gambling Act) or as a game of skill, depending on the level of chance involved. If regarded as a game of skill, prizes and winnings will be regarded as income and taxed as such.

Social gaming and other games not for money (or money’s worth) are not covered by the Gambling Act and therefore can be offered without a licence and/or other restrictions set up by the Gambling Act. It is currently being debated to what extent certain elements of gaming – eg, loot boxes – could be covered by gambling provisions.

Betting offered in betting shops and through agents is part of the competitive section of the market and can therefore be offered by holders of a betting licence.

Other than betting, land-based gambling is generally reserved to the state and state-owned companies. Non-for-profit organisations may organise bingo and sell certain lottery tickets.

Commercial licences related to slots or casino games are available for the provision of gambling on vessels in international traffic. Licences are also available for goods gambling machines, roulette, card games and dice games in amusement parks and in hotels, restaurants and the like where alcohol is legally served.

Gambling and related laws are as follows:

  • Gambling Act (2018:1138);
  • Gambling Tax Act (2018:1139);
  • Gambling Ordinance (2018:1467);
  • the SGA’s Regulations on licence applications (LIFS 2018:1);
  • the SGA’s Regulations and general advice on responsible gambling (LIFS 2018:2);
  • the SGA’s Regulations regarding exemption from the requirement on registration (LIFS 2018:3);
  • the SGA’s Regulations and general advice on state lottery and lottery for good causes (LIFS 2018:4);
  • the SGA’s Regulations and general advice on commercial gambling and betting (LIFS 2018:5);
  • the SGA’s Regulations and general advice on land-based commercial gambling (LIFS 2018:6);
  • the SGA’s Regulations and general advice on gambling on ships in international traffic (LIFS 2018:7);
  • the SGA’s Regulations and general advice on technical requirements and accreditation of bodies for inspection, testing and certification of gambling service providers (LIFS 2018:8);
  • the SGA’s Regulations and general advice on gambling at casinos and token gambling machines (LIFS 2018:9);
  • the SGA’s Regulations and general advice on technical requirements on token gambling machines and automated casino games and on the accreditation of bodies to inspect, test and certify gambling machines (LIFS 2018:10);
  • the SGA’s Regulations on fees for supervision (LIFS 2018:12); and
  • the SGA’s Regulations and general advice on bingo for good causes (LIFS 2019:1).

Other relevant legislation is as follows:

  • Act (2017:670) on Measures against Money Laundering and Financing of Terrorism;
  • the SGA’s regulations and general advice on measures against money laundering and financing of terrorism (LIFS 2018:11);
  • Marketing Act (2008:486);
  • GDPR and the Swedish law on additional provisions related to the GDPR (2018:218);
  • Consumer Services Act (1985:716);
  • Distance and Doorstep Act (2005:59);
  • Act on Payment Services (2010:751);
  • other publications and documents issued by any relevant competent authority, such as the National Board for Consumer Disputes (Allmänna Reklamationsnämnden) or the Swedish Consumer Agency (Konsumentverket); and
  • any other applicable laws and EU regulations and directives.

Through the Gambling Act, gambling is defined as (i) lotteries, (ii) betting, (iii) combination gambling and (iv) pyramid schemes.

The definition of lotteries includes any gambling where the outcome is completely based on chance, so not only traditional lotteries are included in the definition of this term.

Betting means an activity in which the participants have a chance to win a prize and a stake is placed on the outcome of a future event, or on whether or not a particular event will occur in the future.

Combination gambling is gambling in which the participants have a chance to win a prize and the likelihood of winning depends on a combination of skill and chance.

Pyramid schemes include gambling where winnings derive from the bets of future participants and where the likelihood of winning depends on the number of participants who subsequently join. It can be noted that licences are not granted for pyramid schemes, and such schemes are therefore prohibited.

The Gambling Act presumes that gambling is done on physical premises, unless it is explicitly stated that it is or may be offered online. Therefore, there is no separate or particular definition of land-based gambling. By way of example, the word "bingo" includes a lottery where the participants are present at the venue and purchase a bingo card. Online bingo is separately defined as a lottery for which the participants purchase a bingo card online and for which the likelihood of winning depends on the numbers drawn matching those on the bingo card.

Online gambling means gambling that is provided through electronic means of communication and played by one player or a multiple of players.

Offences that are directly linked to gambling activities include the following:

  • a party intentionally or through gross negligence providing unauthorised gambling or gambling without a licence commits the offence of operating unlawful gambling;
  • those who intentionally or through gross negligence promote participation in such gambling as referred to above commit the offence of promoting unlawful gambling. It should be noted that this offence will include marketing activities, for example;
  • those who take inappropriate actions to manipulate the outcome of a game that is subject to licence requirements under the Gambling Act may be convicted for cheating in gambling. It should be noted that this offence will include the manipulation of a sports event (match-fixing), for example; and
  • in some instances, attempts or preparations of the offences may also be punishable under the Swedish Criminal Code.

There are also criminal provisions included in other legislation that concern gambling operators, such as anti-money laundering laws.

The penalties for the operation of unlawful gambling and the promotion of unlawful gambling are fines or imprisonment for a maximum of two years. There will be no sentencing in minor cases, but if the crime has been committed intentionally and in other serious cases, the offences are punishable by imprisonment for a minimum of six months and a maximum of six years.

With regards to the offence of cheating in gambling, the penalty is imprisonment for a maximum of two years. However, if the crime is serious, the penalty shall instead be imprisonment for a minimum of six months and a maximum of six years.

The SGA is looking to issue new regulations on betting, which are expected to include restrictions related to licence holders’ betting offers. Draft regulations are likely to be made subject to a public consultation during autumn 2019.

The SGA is also looking to update its existing regulations on licence applications (LIFS 2018:1).

An investigation has also been initiated by the government where certain issues are to be analysed in relation to the new conditions for sports organisations and horse organisations following the re-regulation, the assessment of Svenska Spel and its adaption to the new laws; an assessment on how to further counteract any harm caused by gambling as well as the possibility of restricting gambling advertising may lead to changes in legislation long to mid-term. Until the final report is issued on 31 October 2020, there are no concrete indications on what changes the government may action.

For gambling operations, the relevant regulator is the Swedish Gambling Authority (SGA), which is also the regulatory authority regarding compliance with AML legislation within the gambling sector.

Regarding other, closely related areas of law, the following authorities have competence:

  • the Consumer Agency is the regulatory authority for marketing and advertising; with regards to the marketing of gambling services, the responsibility is shared with the SGA;
  • the Tax Agency is responsible for ensuring that taxes are properly declared and paid; and
  • the Finance Police is the authority with which SAR/STRs are to be filed.

The Swedish Gambling Act is a framework law, meaning that detailed requirements are found in secondary legislation and will be developed through case law. However, the Gambling Act is also a prohibitory law, which means that any gambling not explicitly included in the scope of the law (or an individual licence) will be prohibited.

The SGA is not able to give individual advice or preliminary rulings, meaning that information on how the SGA regards certain matters has initially been scarce or non-existent in the new market. Operators have had to make their own interpretations, and hefty fines have been issued in cases where the SGA has not agreed.

Six different types of licences exist:

  • the licence for the state monopoly, which includes land-based casinos, gambling on land-based slot machines and lotteries;
  • licences for charities/good causes, which may include certain lotteries, land-based bingo and local pool betting at horse racing tracks. In some cases, registration with the local municipality is sufficient and no licence is needed;
  • licences for land-based commercial gambling, which include specific types of casino games and slot machines if provided in an amusement park or at premises that hold a permit to serve alcohol. This type of licence can also be issued for certain card tournaments;
  • licences for gambling on ships in international traffic, which includes gambling on slot machines and certain limited casino games onboard ships at sea;
  • licences for commercial online gambling, which includes online casino table games, online bingo and online slot machines. Licences can be granted to any operator, including private gambling operators, that satisfies the legal suitability requirements; and
  • licences for (online and land-based) betting, which includes betting on the outcome of future events. Under a betting licence it can be noted that betting on horse races, betting on electronically simulated events and, in certain cases, the outcome of a lottery is permitted. On the other hand, betting on occasions where the majority of participants are under 18 years of age, spread betting and betting on events that are offensive or inappropriate are prohibited. Licences can be granted to any operator, including private gambling operators, that satisfies the legal suitability requirements.

Licences are readily available in the competitive sections of the market, which mainly includes betting and online commercial gambling but also land-based gambling if operated onboard ships in international waters, amusement parks or hotels that hold a permit to serve alcohol. Such licences will be granted to any operator that satisfies the suitability criteria set out in the Gambling Act.

It should also be noted that a licence for betting will include the right to provide both land-based and online betting. Land-based betting can be provided through agents. Agents do not need to hold a licence but will need to be registered with the SGA, and certain due diligence documents need to be provided as part of the registration process.

Licences are normally issued for a period of five years. However, the SGA has limited the licence period in certain instances where it has found reason to reassess the operators’ suitability sooner. One example when the licence period has been limited to three years is when an operator has indicated historic negative equity (the SGA initially limited the licence period to one year but, after appeal by the operators, the administrative court extended the period). Another example is when one group of companies applied for several licences through different subsidiaries and the SGA was not satisfied that sufficient group-wide resources could be allocated to each licence holder. In these cases, the licence period was limited to two years (and this was confirmed by the administrative court after appeal by the licence holders).

Licences under the Gambling Act may be granted to those who:

  • are deemed to have the knowledge, experience and organisation required to run the operation;
  • presumably will run the operation in accordance with acts and other statutes that govern the operation; and
  • are deemed in other respects to be fit to run the operation.

A licence application is filed through the application form provided by the SGA and by the submission of annexes and supporting documents.

Given the limited scope of licences available for land-based operations, only the requirements related to online licence applications (including land-based betting, however) are included in detail below. It should be noted that the requirements for other licence applications in the competitive sections of the market include similar information and documentation.

Annex A

This is to be filled in by key personnel with defined responsibilities in the applicant company, by the board of directors and CEO of the applicant company, by the board of directors and CEO of all qualified owners (please see definition below), and by the ultimate beneficial owner if he/she holds a qualified ownership. A number of due diligence documents shall be appended to Annex A, including:

  • certified ID;
  • a Certificate of Solvency (no bankruptcy);
  • a certificate showing that there is no ban on commercial activities;
  • a certificate showing that no guardianship is in place;
  • employment history for the past ten years (not for management of qualified owners);
  • criminal records;
  • a certificate showing that no debts or taxes are overdue;
  • a tax account excerpt;
  • a copy of the gambling licence (if applicable);
  • the rejection of a gambling licence (if applicable); and
  • the revocation of a gambling licence (if applicable).

Annex B

This is to be filled in by all qualified owners (legal entities) of the applicant company. The definition of “qualified owner” includes those with direct or indirect ownership or voting rights of 10% or more in the applicant company. A number of due diligence documents shall be appended to Annex B, including:

  • a Certificate of Registration;
  • financial documents;
  • a copy of the gambling licence (if applicable);
  • the rejection of a gambling licence (if applicable);
  • the revocation of a gambling licence (if applicable); and
  • any judgment or other decision by a public authority related to the operation of gambling (if applicable).

Annex C

This is a Gambling Concept Description, including specifications of the products included in the application, the gambling system location and a detailed description of each game and game rules.

In addition to Annexes A-C, the following documents shall be submitted with a licence application:

  • a description of the procedures for handling personal data;
  • a business plan;
  • a description of the owner/group structure;
  • a description of the operations;
  • financial documentation;
  • documents showing that the technical requirements are satisfied;
  • a tax account excerpt;
  • a solvency certificate or a debt extract;
  • the company registration certificate or equivalent;
  • the Articles of Association and, if applicable, the Memorandum of Association;
  • Power of Attorney for the contact person;
  • Power of Attorney for the representative;
  • a copy of other gambling licences (if applicable);
  • the rejection of a gambling licence (if applicable);
  • the revocation of a gambling licence (if applicable); and
  • any judgment or other decision by a public authority related to the operation of gambling (if applicable).

All documents shall be submitted in Swedish or shall be translated into Swedish.

The timescale for a licence application will depend heavily on how complete the application is, and on the status of the applicant company and its qualified owners. An application with a complete set of documents from an operator with good finances, reliable history and an uncomplicated group structure may be processed by the SGA within two to three months. However, depending on the circumstances in the specific case, the process may take significantly longer.

Licence application fees are as follows:

    1. licence for commercial online gambling: SEK400,000;
    2. licence for betting: SEK400,000;
    3. joint application for a) and b): SEK700,000;
    4. renewal of licence under a)-c): SEK300,000;
    5. amendment of licence under a)-c): SEK150,000;
    6. licence for state lottery or not-for-profit: SEK5,000-150,000;
    7. amendment of certain licences under f): SEK40,000;
    8. licence for bingo (note: not online bingo): SEK30,000;
    9. amendment of licence under h): SEK5,000;
    10. licence for local pool betting on horses: SEK3,600;
    11. licence for land-based slots (per venue): SEK2,800;
    12. permit for possession of slots: SEK3,600;
    13. licence for land-based casino games (per venue): SEK3,600;
    14. licence for land-based casino (per venue): SEK70,000;
    15. amendment of licence under n) (per venue): SEK15,000;
    16. card tournaments: SEK4,000-25,000; and
    17. amendment of key persons: SEK800.

The annual fees are divided into a fixed fee and a variable fee, and the rate will depend on the type of licence. The fixed fees are in accordance with the following (full 12 months):

  • licence for the state lottery: SEK700,000;
  • licence to offer casino in land-based (state) casino: SEK3.5 million;
  • licence to offer slots in land-based (state) casino: SEK2.5 million;
  • licence for charities (excluding bingo and local pool betting): SEK15,000-700,000;
  • licences for commercial online gambling or betting: SKE30,000-500,000; and
  • licences for commercial land-based gambling: SEK2,400.

Where there is an interval, the fee depends on the operator’s expected turnover. For example, for online commercial gambling or betting, the following fees apply:

  • annual turnover of less than SEK10 million: SEK30,000;
  • annual turnover of SEK10 million to SEK20 million: SEK60,000;
  • annual turnover of SEK20 million to SEK50 million: SEK120,000;
  • annual turnover of SEK50 million to SEK100 million: SEK240,000;
  • annual turnover of SEK100 million to SEK200 million: SEK300,000;
  • annual turnover of SEK200 million to SEK500 million: SEK400,000; and
  • annual turnover of more than SEK500 million: SEK500,000.

However, during the first year of operation, holders of licences for online commercial gambling or betting will have to pay a fixed fee of SEK450,000 per licence.

The variable fee is an hourly rate of SEK1,500 per hour spent by the SGA and expenses that have been incurred as part of the SGA’s supervision of the operator.

Depending on and subject to the relevant licence, land-based gambling may be offered in one of the four state-owned casinos, at amusement parks, at hotels and restaurants with a permit to serve alcohol, at bingo halls, at horse racing tracks and on ships in international traffic.

State lottery and betting may be provided through agents. Agents do not need to hold a licence but will need to be registered at the Swedish Gambling Authority, and certain due diligence documents need to be provided as part of the registration process.

The changes expected for the land-based gambling sector are the same as those for the online sector (although the consequences of the changes may be different) – please see 6.5 Recent or Forthcoming Changes.

Any operator satisfying the criteria of suitability set out in the Gambling Act may apply for and receive a betting and/or online commercial gambling licence. There is no limit on the number of licences to be issued.

A licence applicant will need to appoint a Swedish-based representative if the operator is based outside the EEA.

Also, gambling servers should be based in Sweden or in a jurisdiction where an MOU has been entered into between the local regulator and the SGA, or else the SGA will require remote access.

B2B licences are not available in Sweden. Suppliers need to go through a certification process to ensure compliance with the technical regulations, and the licensed B2C operators shall submit the result to the SGA.

Affiliates are not directly regulated through the Gambling Act. However, under the Swedish Marketing Act, both affiliates and the operator whose products are being marketed may be made liable for any violations of marketing provisions.

It should be mentioned that marketing may not be aimed directly at players who have opted to self-exclude from gambling. This concerns players who have self-excluded from an individual operator and also players who have self-excluded through the National Self-Exclusion Registry.

The current restriction presents a practical problem for affiliates since the National Self-Exclusion Registry shall be checked via a private API before direct marketing may be sent out, and affiliates are not given access to the register by the SGA.

White label solutions are accepted in Sweden but the operator contracting with the white label brands is the holder of the licence and is responsible for the white labels’ compliance with both the Gambling Act and the marketing provisions.

A specific form supplied by the Gambling Authority shall be filled in and submitted together with the licence application if white labels are to be offered. For example, the contact details of each brand owner and the white label agreement shall be submitted.

The new Swedish Gambling Act is in itself a complete overhaul of the legislative framework in Sweden and has enabled any gambling operator that satisfies the suitability criteria in the Gambling Act to seek and acquire commercial online gambling licences and betting licences. As such, no changes are expected in the near future.

As already outlined above, the SGA is looking to issue new regulations on betting, and these are expected to include further restrictions related to licence holders’ betting offers. Draft regulations are likely to be made subject to a public consultation during autumn 2019.

The SGA is also looking to update its existing regulations on licence applications (LIFS 2018:1).

An investigation has also been initiated by the government where certain issues are to be analysed in relation to the new conditions for sports organisations and horse organisations following the re-regulation, the assessment of Svenska Spel and its adaption to the new laws; an assessment on how to further counteract any harm caused by gambling as well as the possibility of restricting gambling advertising may lead to changes in legislation long to mid-term. Until the final report is issued on 31 October 2020, there are no concrete indications on what changes the government may action.

The SGA has the power to order an internet service provider to create a warning message that is clearly displayed in conjunction with visits to websites providing gambling without the requisite licence. The message shall inform visitors that the operator lacks a licence in Sweden and is not under supervision from Sweden, and that the player is liable to pay tax on any winnings.

If a gambling account is used or can be presumed to be used for the transfer of wages or winnings to or from an unlicensed gambling operator, the SGA can order a payment service provider to block electronic payment transactions to and from the relevant account.

A "duty of care" is introduced through the Gambling Act, and it is the starting point for all responsible gambling measures. The term "duty of care" covers active monitoring of gambling behaviour and intervention from the licence holder if gambling problems are detected or suspected. A licence holder shall ensure that social and health considerations are considered in the gambling operations in order to protect players from excessive gambling and help them reduce their gambling when this is called for. A licence holder shall present a written action plan detailing how this duty of care is fulfilled.

Licence holders shall also have established procedures to contact players in cases where problem gambling has been detected or suspected, and all responsible gambling measures taken shall be documented.

Other responsible gambling measures in the Gambling Act include the following:

  • the minimum age for gambling is 18 years (with certain exceptions);
  • it is prohibited to allow gambling on credit;
  • only welcome bonuses are permitted (no retention bonuses);
  • a self-assessment test shall be clearly visible and always possible to access on pages of the website where the player can play or where there is information about the player account or where there is information on responsible gambling;
  • where it offers gambling services, a licence holder shall provide contact details to a helpline for gambling problems that can offer help on the basis of Swedish conditions;
  • customer service providers who have been educated in responsible gambling shall be in place, and certain other roles shall also receive training on the matter;
  • there shall be rules in place regarding employees’ and suppliers’ participation in gambling;
  • measures to counteract and detect cheating, the violation of game rules and violations of terms and conditions shall be in place;
  • multiple brands are allowed to be offered under one licence if all responsible gambling measures and limitations set by players apply across brands. The player’s total deposits shall also be shown as an accumulated amount on all brands;
  • players shall actively specify and confirm their stakes when gambling. Information about the game, the rules and the likelihood of winning shall be easily accessible in Swedish for players and authorities;
  • a game may not be designed or programmed so that players are given the impression of being close to winning when this is not the case;
  • free games and trial games may not have a random outcome that is different to the corresponding game when played with stakes;
  • a game may not give the impression that the player’s approach or choices have an impact on their probability of winning, if winning is exclusively down to chance; and
  • if the licence holder offers options that affect the outcome of the game, a notification shall be displayed for the player for at least three seconds before an automatic choice is made.

It is mandatory for players to set a maximum deposit limit per day, week and month. An increase will come into effect only after 72 hours. If a player raises a limit or sets a deposit limit higher than SEK10,000 per month, the licence holder shall contact the player.

Players shall also be given the option to limit their log-in time per day, week and month. An increase will come into effect only after 72 hours.

Self-exclusion options shall be available. The player shall be able to choose from 24 hours, another certain length of time or indefinitely. Information on the National Self-Exclusion Register shall also be provided, as well as a link to the page where players can choose to exclude with all licensed operators.

Logos with links to a self-assessment test, deposit limits (gambling budget), limitation log-in time and exclusion from gambling shall be pinned at the top of all the licence holder’s websites, apps, etc. The logos are provided by the SGA.

Players shall receive regular, clear and varied notifications concerning winnings and losses, and information on how long they have been logged in. The notifications shall be shown for as long as required in order to counteract excessive gambling. The notification must be acknowledged by the player, and the player shall be given the choice between ceasing or continuing gambling.

Finally, upon every log-in the player shall receive information about the licence holder’s responsible gambling measures, the player’s own limits set and the player’s accumulated losses over the past 12 months.

Sweden is a member of both FATF and the EU, and has accordingly implemented legislation to combat money laundering and terrorist financing through Act (2017:630) on Measures against Money Laundering and Terrorist Financing. The legislation implements the 4th AML Directive and covers both land-based and online gambling operations.

In addition to the Act (2017:630) on Measures against Money Laundering and Terrorist Financing, the SGA has issued regulations and general advice on the prevention of money laundering and the financing of terrorism (LIFS 2018:11).

Act (2017:630) on Measures against Money Laundering and Terrorist Financing more or less follows the 4th AML Directive. Consequently, customer due diligence within gambling shall be performed:

  • when a business relationship is established;
  • on single transactions that amount to EUR2,000 (or the equivalent) or more; and
  • on transactions that are below the amount of EUR2,000 which the operator realises or should have realised are connected, and which jointly with one or more other transactions amount to at least this amount.

However, the SGA has clarified that it considers that a business relationship is established when a customer registers with an online gambling operator, and that due diligence is therefore mandatory in relation to all online customers. This means that, for online operations, the EUR2,000 threshold is irrelevant since due diligence measures should already have been performed.

Also in line with the 4th AML directive, Swedish regulations require gambling companies to adopt a risk-based approach. In short, this means that resources should primarily be used where the risk of money laundering and terrorist financing are the biggest. Where the risks of money laundering and terrorist financing are lower, less comprehensive measures are necessary.

Under Act (2017:630) on Measures against Money Laundering and Terrorist Financing, an operator shall carry out a general risk assessment, which shall be the basis for all other work that the operator carries out to prevent money laundering and terrorist financing. The SGA has consequently regarded this general assessment as a key element for operators’ AML work. The general risk assessment must include how the licence holder's products and services could be used to launder money or finance terrorism, and how big the risk is that this will happen. Any and all factors that may have a bearing on the risks of money laundering and terrorist financing must be taken into account, but the type of products and services offered, customers, distribution channels and geographical risk factors are considered particularly. The general risk assessment shall be in writing.

In addition to the general risk assessment, a licence holder must assess the risks associated with each customer, which means that all customers must be divided into different risk classes (high, medium or low). The risk classification should be made based on the general risk assessment of the business and the knowledge the licence holder has about the specific customer.

A licence holder shall put in place routines for measures against money laundering and terrorist financing, to counteract the risks identified in the business. It is therefore important that there is a close connection between the general risk assessment and the routines.

Routines should include:

  • measures for customer knowledge;
  • monitoring and reporting;
  • the processing of personal data;
  • the appropriateness of staff;
  • the training and protection of employees;
  • compliance and internal control; and
  • rutines for model risk management.

Special provisions regarding group-wide routines exist for licence holders who are part of a group.

Regulatory actions and the supervision of the marketing and advertising of gambling services is divided between the SGA and the Swedish Consumer Agency. The two regulators co-operate closely but have also agreed to divide the regulatory tasks between them as follows.

Consumer Agency:

  • moderate marketing;
  • direct marketing;
  • marketing targeting persons under the age of 18;
  • the provision of information about minimum age and contact details to problem gambling support organisation;
  • advertising lotteries (reklamprislotterier); and
  • general rules from the Marketing Act.

The SGA:

  • the provision of information about the games, including the rules and likelihood of winning, and ensuring that these are easily accessible and in Swedish;
  • bonuses;
  • sponsorship restrictions; and
  • general rules from the Gambling Act.

Marketing is defined in the Marketing Act as advertising and other measures in the course of business activities which are intended to promote the sale of and access to products, including a trader’s actions, omissions or other measures or behaviour, before, during or after the sale or delivery of products to consumers or traders.

Generally, there is a marketing presumption in Sweden, meaning that information related to a trader or a product/service is considered to be marketing, unless an exception applies.

Provisions regarding the marketing of gambling services are found mainly in Chapter 15 of the Gambling Act. General rules applicable to all marketing are found in the Marketing Act.

The Marketing Act is based on Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market. Annex 1 of this directive is a blacklist that specifies commercial practices which are considered unfair in all circumstances. The annex has the force of law in Sweden.

Other important sources of information and help when interpreting the marketing rules include the following:

  • preparatory works (prop 2017/18:220 in relation to the Gambling Act and 2007/08:115 in relation to the Marketing Act);
  • case Law from the Patent and Market Court;
  • Commission Recommendation on principles for the protection of consumers and players of online gambling services, and for preventing minors gambling online;
  • Marketing Guidelines issued by the Swedish gambling trade associations – Spelbranschens Riksorganisation (SPER) and Branschföreningen för Onlinespel (BOS);
  • general guidelines, reports and general advice issued by the Swedish Consumer Agency;
  • general guidelines and reports issued by the Swedish Advertising Ombudsman; and
  • the ICC Advertising and Marketing Communications Code.

First of all, it should be noted that it is a criminal offence to advertise or otherwise market gambling services without possessing the required licence.

Secondly, there are several restrictions related to the marketing of lawful and licensed gambling; the most important provisions are included below.

The general starting point is that the marketing of gambling services shall employ a degree of moderation, although there is not yet an exact definition of what is included in the definition of moderate marketing. Guidance can mainly be found in the preparatory works and in a report on the review of the gambling market issued by the Consumer Agency in June 2019. Case law will also develop over time, with two cases already being assessed by the Patent and Market Court.

The marketing of gambling may not be aimed specifically at people under 18 years of age, nor directly at players who have opted for self-exclusion from gambling. If a player has closed his/her player account with a licence holder, marketing may only be aimed directly at the player if said player actively approved this in conjunction with the account closure.

Under Chapter 15, Section 3 of the Gambling Act, commercial communication concerning gambling shall include clear information regarding the minimum age to gamble. Furthermore, at venues where gambling takes place, and in the context of commercial communications concerning gambling – with the exception of such communications via radio – licence holders shall ensure that contact information is also stated for an organisation that provides information on, and support for, problem gambling.

Licence holders who conclude sponsorship agreements shall ensure that logos and the names of gambling products or gambling services are not found on products that are intended to be used or worn by persons under 18 years of age.

Under the Marketing Act, marketing shall also be consistent with good marketing practice at all times. Good marketing practice is defined as the generally accepted business practices or other established norms aimed at protecting consumers and traders in the marketing of products. For Swedish holders of gambling licences, one example of good marketing practice is the Marketing Guidelines, which have been issued by the two trade associations for gambling – BOS and SPER.

The Marketing Act also includes provisions relating to misleading marketing, how to manage limitations in the means of communications, invitations to purchase, misleading copies, comparative advertising and unsolicited marketing (also known as direct marketing).

Closely related to marketing is the offer of bonuses, which is severely restricted in Sweden. A licence holder may not offer or provide bonuses beyond the first occasion on which the player participates in a game. A bonus is defined as a discount or similar financial incentive that is directly linked to the gambling. From either ongoing or closed bonus cases, it can be concluded that the SGA has made a wide interpretation of what is to be regarded as a bonus, and considers the following offers to be prohibited:

  • conditional and non-conditional rewards and gifts to customers;
  • cash prises in buy-in casino tournaments and similar prizes that are added on top of the basic game (depending on the circumstances, this can also and instead be regarded as the offering of a lottery, which can only be offered by the state or for good causes);
  • cash or goods prizes in free games;
  • poker tournament (non-cash) prizes;
  • rewards for signing in; and
  • VIP schemes/offers.

Further restrictions related to bonuses include that a licence holder shall – in conjunction with providing the offer and use of the offer by the player – inform the player in clear and plain language of the terms and conditions of the offer. Payment of a bonus shall be made as soon as possible after the terms and conditions have been met. Furthermore, a bonus to an individual player may not be offered on terms that differ from those offered under the same conditions to other players who play the same game, and a player shall have at least 60 days to fulfil any terms that may have been linked to the pay-out of a bonus.

The Consumer Agency may file a lawsuit at the Patent and Market Court against operators found to violate provisions related to marketing. The lawsuit may include a prohibitory injunction, which can be coupled with fines (it can also be ordered in the interim). When it comes to violations of the Marketing Act, the Consumer Agency may also request the payment of a market disturbance fine.

For injunctions in some matters of lesser importance, no court involvement is required, and the Consumer Ombudsman has direct authority to take action.

It should be noted that violations of the marketing provisions can also be taken into account by the Gambling Authority, for example when assessing whether an operator is suitable to hold a licence or when considering if a licence is going to be renewed.

Under Swedish regulations, any legal entity directly or indirectly owning more than 10% of the shares or voting rights in a licence holder shall submit an Annex B and supporting due diligence documents (please see 4.6 Application Requirements).

Any member of the board of directors or the CEO of such company shall submit an Annex A and supporting due diligence documents. Any physical individual owning more than 10% of the shares or voting rights in the licence holder shall also submit an Annex A.

Any changes shall be reported to the SGA within two weeks, and a fee of SEK800 shall be paid.

As per above, the trigger relating to change of control provisions is a 10% direct or indirect ownership of the licence holder.

The requirements are the same, regardless of whether investment is active or passive. It is the percentage of ownership of shares or voting rights that is of interest.

The SGA can enforce the provisions of the Gambling Act directly through decisions against licence holders. The sanctions available to the SGA are covered in detail below.

The SGA is also empowered to take actions against licence holders and legal representatives of licence holders under Act (2017:630) on Measures against Money Laundering and Terrorist Financing. The SGA may intervene by issuing an injunction to rectify the matter, and may also issue a financial penalty in cases that are not minor.

Decisions from the SGA can be appealed to the administrative court and thereafter in some instances to the higher administrative court and eventually the Supreme Administrative Court. Unless the SGA has included that its decision shall be applicable in the interim, the decision is not enforceable until the decision has entered into legal force – ie, there is a final decision or judgment in place that cannot be appealed.

As part of its supervision, the SGA may visit premises of land-based operations or the location of the gambling system (servers). If equipment is placed abroad, the SGA may ask for remote access or request assistance from other regulators with which it has entered into MOUs.

As described in more detail above, the Consumer Agency can enforce the marketing rules through the initiation of a legal case at the Patent and Market Court.

A number of sanctions are available to the Gambling Authority if licence holders do not comply with the Gambling Act and the new legislative framework, including the following:

  • order to rectify;
  • prohibitory injunction (could be coupled with fines);
  • change of licence conditions;
  • remark (could be coupled with a penalty of between SEK5,000 and 10% of gross turnover);
  • warning (could be coupled with a penalty between SEK5,000 and 10% of gross turnover); and
  • revocation of licence (also in the interim).

The Gambling Authority may refrain from intervention if the offence is minor or excusable, if the license holder rectifies the matter or if another authority has taken action against the licence holder and such action is deemed sufficient.

Between the re-regulation of the Swedish gambling market coming into effect on 1 January 2019 and mid-October 2019, the SGA has issued decisions in 28 cases, 24 of which have resulted in either a warning and penalty fee, a remark or (in one case) revocation of the licence. A vast majority of the cases have been appealed to the administrative court.

Supervisory actions are also ongoing, mainly in the following areas:

  • bonus offers;
  • betting that includes minors;
  • AML;
  • sponsorship;
  • ships in international traffic;
  • integration with the National Self Exclusion Registry;
  • casinos in restaurants; and
  • gambling in State Casinos.

Financial penalties through decisions from the SGA are payable when the decision from the SGA enters into force – ie, when there is a final decision or court judgment that cannot be appealed. However, the SGA can also make a decision in the interim, which means that it shall be applied immediately.

The pecuniary penalty for violations of Act (2017:630) on Measures against Money Laundering and Terrorist Financing is set at a maximum of twice the profit made due to the incompliance (if such profit can be established) or EUR1 million, whichever is higher. The penalty may not be set to an amount lower than SEK5,000.

If the gambling provider is a legal person and has been found to be in violation of the AML provisions, the SGA may also intervene against people who are members of the board of directors of the legal person or its executive director, or against someone else who, in an equivalent manner, represents the gambling provider. An intervention may only be carried out if the violation is serious, repeated or systematic, and if the person in question caused the violation intentionally or through gross negligence.

If voluntary payment of due financial penalties is not made, the case will be transferred to the Swedish Enforcement Agency for debt collection.

Social gaming generally falls outside the scope of the Gambling Act, since no gambling for money takes place; as such, social gaming is permitted. However, it should be noted that there is a current debate about whether certain elements, such as loot boxes, should be regarded as a lottery and regulated in accordance with the Gambling Act. The Consumer Agency has found that this is the case if the content of such loot boxes represents money or money’s worth in “real life”.

Since 1 January 2019, betting on eSports is covered by the Gambling Act and can therefore be provided under a betting licence.

From 1 January 2019, betting on fantasy sports may be offered under a betting licence. However, in certain cases, manager games may include enough skill to instead be regarded as a competition. As such, they do not fall under the Gambling Act and can be offered, but winnings will be taxed as income and the social charges should be paid by the operator.

Skill games are regarded as competitions and, as such, do not fall under the Gambling Act and can be freely offered, but winnings will be taxed as income and the social charges should be paid by the operator.

Blockchain and cryptocurrencies are not permissible under the Gambling Act since a licence holder may only receive deposits into a player account from a payment service provider in accordance with Act (2010:751) on payment services.

There is currently no new or major gambling reform under way.

With some exceptions, gambling tax shall be paid for any licensed gambling, at a rate of 18% of the gross gambling revenue (stakes accepted – winnings paid out).

Nordic Gambling

7 A Odenplan
Norrtullsgatan 6
113 29 Stockholm
Sweden

+46 731 40 47 37

maria@nordicgambling.com www.nordicgambling.com
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Law and Practice

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Nordic Gambling is the only legal firm with established offices in both Denmark and Sweden which specialises in gambling-related law. The firm has extensive experience in the industry, working with operators, suppliers, service providers and government regulators.  It has been closely involved in the development of the law and regulation in a number of European jurisdictions, including Denmark and Sweden. The five-strong team is qualified to assist in any matter related to gambling, including licensing, compliance advice and public affairs. It also advises on areas closely related to gambling, including anti-money laundering, data protection, marketing, sponsorship, etc.

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