Sweden’s Administrative Court has annulled a decision taken by the Swedish Gambling Authority (SGA) last year to issue ATG with an official warning and a SEK6m penalty fee.
The decision was made in November following “serious shortcomings” in ATG’s AML measures, after the SGA identified eight cases in which the operator had failed to sufficiently identify its customers and their source of funds.
Alongside ATG’s SEK6m penalty fee, Kindred Group subsidiary Spooniker was hit with a SEK10.9m fee and another operator, PinBet, was issued a penalty of SEK2m for similar failings.
Now, the decision against ATG has been overturned by Sweden’s Administrative Court.
The operator lodged an appeal with the court after the penalty was issued. The court then said it had made a partially different assessment of the case from the SGA’s original ruling.
In its original decision, the SGA determined that the failings at ATG were both “serious and systematic,” thus resulting in the SEK6m penalty.
The Administrative Court ruled, however, that while some of ATG’s failings did constitute violations of the Money Laundering Act, they were not shown to be “systematic or repeated”.
Given ATG’s customer awareness work in general, it said, the shortcomings “did not entail a clearly increased risk of the business being used for, for example, money laundering”.
“The violations are not, either individually or collectively, so serious as to warrant a warning and a penalty fee,” the court concluded and thus annulled the SGA’s original decision.
That judgement can now be appealed by the regulator to the Court of Appeal in Jönköping.
In a statement published by the operator, ATG referred to the ruling as “a very important victory for us”.
“Today’s decision also raises a number of larger questions,” said ATG CEO Hasse Lord Skarplöth.
“The SGA has requested to raise the limit for penalty fees to over SEK10m in future cases. My opinion is that that request should be strongly questioned after today’s decision from the Administrative Court.
“The same applies to the SGA’s strategy, which differs from the rest of the world of authorities – one should spend more time supporting than punishing the actors within the licensing system, and put resources into defending the Swedish licensed market and chasing the unlicensed gambling companies.”
Skarplöth’s comments reflect sentiments expressed in other areas of the Swedish market. Trade association BOS recently released a statement echoing his view on the SGA’s focus as a regulator.
BOS general secretary Gustaf Hoffstedt suggested that in order to encourage channelisation of customers into Sweden’s regulated market, “a shift in mentality on the part of the state is required, from hunting, fining and limiting the range of games for licensed gambling companies to hunting the unlicensed ones instead”.