The Swedish Trade Association for Online Gambling (BOS) has called for Sweden’s gambling regulator to take cues from the way finance, education and local government are overseen.
BOS claims that the Swedish Gambling Inspectorate, Spelinspektionen, could foster better long-term compliance by taking a look at the activities of the Swedish Financial Supervisory Authority (FI), the Schools Inspectorate (SSI, and Stockholm County Administrative Board.
“We believe that the licensed gambling market in Sweden would benefit if the Swedish Gambling Authority were to adopt working methods more closely aligned with those of other Swedish government agencies,” said Gustaf Hoffstedt, Secretary General of BOS.
Trade body takes aim at enforcement
In a report comparing the Inspectorate with the other three regulators, BOS has taken particular aim at the gambling regulator’s sanctions policy.
The Inspectorate, like other European regulators such as the British Gambling Commission and Dutch KSA, is particularly active when it comes to enforcement in cases of non-compliance – as one would expect of a regulator for a high-risk industry.
BOS, however, believes that sanction scaling could be made more proportional.
The trade body points to the FI and Stockholm County’s setting of sanction fees at lower percentages of their available range – such as below 20-27% in the case of the FI and under 5% in the case of the County.
This adjusts sanctions more proportionately to turnover and severity of the offence, BOS argues.
It has also argued for a more “system oriented” approach to anti-money laundering (AML) supervision, again citing FI and Stockholm County’s approach. This approach would focus more on overarching risk assessments, governance and procedures, and would evaluate betting firm’s “complete compliance framework” instead of individual errors.
The Inspectorate could argue, however, that assessing a company’s entire compliance framework and record instead of individual file errors is not the point – as the file errors should not be occurring in the first place.
Nonetheless, BOS believes that the current approach ignores operator risk models and gives an incomplete picture of overall risk management.
The trade body stated that 11 out of 12 Inspectorate decisions based on Sweden’s 2021 AML Act were based on small samples of five-15 customer files, without considering business-wide risk assessments.
Hoffstedt asserted that the changes would “lead to a more risk-based approach, which would strengthen efforts against money laundering and enhance other areas of supervision”.
Nothing new…
Differences of opinion between BOS and the Inspectorate are hardly uncommon.
The trade body has been particularly vocal about the impact Swedish regulation is having on channelisation. Like other Nordic nations, namely Denmark but from next year Finland, Sweden used to have a state monopoly for gambling, but moved on from this in 2019.
Since then, the chanelsation rate has increasingly struggled, particularly for online casinos. The overall channelisation rate is 84%, with sports betting sitting at an impressive 95%, but online casino at a more dismal 68% according to the latest figures.
Last year, a BOS study – which like this year’s study was conducted by Nordic Legal – pointed to liabilities in online casino regulation as a reason behind struggling channelisation.
A narrow definition of permissible games was cited in particular, with BOS arguing this puts legal Swedish gaming firms at commercial competitive disadvantage to the offshore and illegal markets.
This doesn’t mean the trade body sees the Inspectorate as all bad, however. In this year’s report, BOS has praised the regulator’s nuance when it comes to sanctions severity in certain cases, for example.
“We hope that this report can serve as a basis and an inspiration for such an ambition — that the Swedish Gambling Authority might look to other Swedish government agencies in its approach to supervision and sanctions,” Hoffstedt concluded.
