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The Supreme Administrative Court of Sweden has ruled that penalty fees issued by the Swedish Gambling Authority (SGA) should be based on gross gaming revenue (GGR), not annual turnover.
The ruling, issued on May 9, follows a long legal battle between the gambling regulator and Genesis Global that began in 2019, after the operator was fined SEK4m (€397,000) by Swedish authorities for not being properly connected to Spelpaus, the national self-exclusion register, for nine days.
The fine was later reduced by the Administrative Court of Appeal in Jönköping in 2021.
However, both sides contested the decision of the appeal court.
Following the ruling, the SGA said it must "re-examine the issue of penalty fees for Genesis Global Ltd".
"The authority also analyses what significance the court's conclusions may have in other cases regarding penalty fees," the SGA said.
Maria McDonald, a founding partner of law firm Nordic Gambling, explained that the ruling “is binding and from now on any sanction fee issued by the Swedish Gambling Authority (SGA) will be based on the operator’s net turnover or GGR as the industry normally refers to it as”.
The case has now been referred back to the SGA for a new decision on the sanction fee, based on GGR.
“It will be interesting to see the outcome. Since the SGA still has the possibility to issue sanctions of up to 10 percent of the GGR, the final fee may not be as low as the industry is hoping. Nonetheless, it is very positive that the SGA must now take the actual financial results of the operations into account, rather than the misleading figure of player stakes,” McDonald told VIXIO GamblingCompliance.
She believes that a large majority of the operators who have been sanctioned will now try to challenge the decisions or judgments against them.
The Swedish Trade Association for Online Gambling (BOS) welcomed the ruling, which it also believes could lead to “significant cost reductions” for licensees but added that the issue is “far from settled”.
BOS secretary general Gustaf Hoffstedt said he hopes the SGA's review of sanction decisions will not simply result in it increasing the penalty fee based on GGR tenfold, “just to get to the same level as the previous fee based on gross turnover”.
“The Swedish penalty fees have been grotesquely high and now the Supreme Administrative Court is giving Sweden a second chance to settle on a more reasonable level for penalty fees,” Hoffstedt said.
Separately, Sweden’s legislature (Riksdag) approved the government’s proposal for measures primarily aimed at targeting illegal operators and countering the influence of organised crime in fixing sports events.
The raft of measures includes the possibility to request that payment service providers block bets and payouts of winnings to and from unlicensed gaming companies.
The SGA will also be allowed to make use of gambling services anonymously as part of its supervisory powers.
Licensees will be allowed to store and pass on personal data to prevent match-fixing and will have to disclose information to the Police Authority on request relating to criminal investigations related to gambling.
The approved new measures require changes to gambling laws that will come into force on July 1, 2023.
Maria Wennerberg Sedigh, CEO of the National Gaming Industry Association (SPER), whose members include state-owned Svenska Spel, ATG and Paf, said the decision is an "important step" towards “better control of both unlicensed gambling and match-fixing".
“Together with the government's recently decided assignment to the Swedish Gaming Authority and the Swedish Financial Supervisory Authority to review how cooperation can be developed to increase the possibilities of blocking payment, the authorities are strengthened in their work to counter illegal gambling activities,” she said.
