The Kindred Group won its appeal against an SGA sanction that alleged breaches of a temporary online casino deposit limit. [Image: Shutterstock.com]
Initial SGA ruling dismissed
The Kindred Group emerged victorious in its appeal against a Swedish Gambling Authority (SGA) decision that alleged that one of the gambling company’s subsidiaries broke COVID-19 pandemic deposit limit rules.
The hearing on the matter took place in the Swedish Administrative Court in Linköping, with the judges dismissing the initial SGA ruling. In a statement on Tuesday, the SGA outlined that it has the option to appeal this decision.
players were able to make deposits to an adjacent sports betting account and subsequently transfer the funds into their online casino account
Kindred’s Spooniker Ltd subsidiary and local operator ATG received SGA sanctions last December for supposedly breaking the rules over the temporary weekly deposit limit of SEK5,000 ($581.17) for online casinos. The SGA had conducted an investigation which revealed that players were able to make deposits to an adjacent sports betting account and subsequently transfer the funds into their online casino account to gamble with.
As a result of the temporary measure, if someone had a deposit limit that was greater than SEK5,000, they could only wager with the sportsbook. To play casino games, the account holder would need to lower the limit to SEK5,000 or below. In order to circumvent the restriction, players would set a high limit and deposit funds to their sports betting account before lowering the limit back down to no more than SEK5,000, which allowed them to play casino games using the newly deposited money.
This loophole meant that Spooniker account holders could bypass the pandemic deposit limit, allowing them to deposit as much as SEK50,000 ($5,811.67) on a weekly basis and use the funds to play online casino games.
The SGA gave Kindred three weeks to rectify the issue, stating that it would fine the gambling operator SEK1m ($116,233.50) for every week that the loophole was still live.
Differences in interpretation
In response to the SGA sanction, Kindred told EGR that it had interpreted the temporary measure correctly, saying:
“It is the deposit limit set by the customer that determines his/her access to the products. However, the SGA has adopted a different interpretation that it is the actual deposits made that determines product access, which is not what is intended by the regulations.”
the limit applies to deposits at online casinos but not sportsbooks
Kindred decided to appeal the authority’s decision and the court ultimately sided with the operator. The judges concluded that the SGA’s interpretation of the temporary regulations was not correct and proceeded to annul the gambling regulator’s initial injunction.
Despite players being able to play casino games using new weekly deposits worth over SEK5,000, this did not mean Kindred violated the temporary regulations, as the limit applies to deposits at online casinos but not sportsbooks.
Kindred requires all players to set a deposit limit to comply with Swedish law.
Hard stance on operators
The Swedish government approved the cap on deposits in June 2020 amid concerns about increasing levels of online gambling during the pandemic. The move sparked uproar among licensed operators in the region, who maintained that such a restrictive measure would drive gamblers towards black-market sites.
The temporary deposit limit was initially intended to remain effective until the end of 2020, but the ongoing pandemic led the authorities to extend the measure until at least June 2021.
The SGA has a reputation for very closely monitoring operators and their actions. In February 2021, ComeOn Group brands were hit with SEK175m ($20.3m) worth of fines for offering “unauthorized bonus offers”. Betsson got fined SEK20m ($2.3m) in June 2020 for allowing customers to add funds to their accounts by using retail vouchers, while the Kindred Group incurred a SEK100m ($11.6m) penalty in March 2020 over bonus offer breaches.