Swedish court decision could open floodgates for review of gambling penalty fees

The court found “ambiguities” in how Sweden’s gambling regulator calculated its penalties.

Sweden.- The Supreme Administrative Court has made a decision that could open the door for gaming operators to recoup penalty fees paid to Sweden’s regulator. The court has upheld Spelinspektionen‘s penalisation of an online casino operator but says it must redo its maths.

Spelinspektionen initially issued a SEK 4m (€360,000) fine against Genesis Global for failure to integrate its brands with the Spelpaus self-exclusion system. After Genesis appealed, several court decisions reduced the fine, first to SEK 2m and then to SEK 1m. Sweden’s regulator in turn appealed against those decisions, taking the matter to the Supreme Administrative Court.

The court has ruled that Spelinspektionen’s decision was sound but that the lower courts were correct in deciding that the amount of the fine needed to be revised. The court said there were “ambiguities around the concept of turnover” and regarding how the penalty was applied, ordering Spelinspektionen to review its methods.

The court’s decision may set a precedent that could open the doors for the revision of other penalties issued by Spelinspektionen in the period since Sweden liberalised its online gambling market in 2019. The court is analysing this potential effect.

“Grotesquely high penalties”

The Swedish Online Gambling Trade Association (BOS) has been arguing that fees should be based not on gross turnover but on gross gaming revenue (GGR), which is usually less than 10 per cent of gross turnover. It said it hoped Spelinspektionen would not now raise the rates of the fine to justify previous penalties.

BOS director general Gustaf Hoffstedt said: “This decision is very welcome, albeit late. 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 gamblers and not the gambling company.

“We look forward to the SGA’s review of sanction decisions made since the Swedish reregulation. We appeal to the inspectorate not to increase the penalty fee based on GGR tenfold, just to get to the same level as the previous fee based on gross turnover. 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.”

In December, Malta-based Genesis Global left the British online gambling market. It ran 14 Gambling Commission-licensed sites.