The Swedish Gaming Authority (SGA) has issued an injunction to iGaming operator Videoslots after it was revealed that the company had violated Sweden’s deposit cap.
In early 2020, the Swedish government revealed plans to put a SEK 5,000 cap on weekly deposits at all online casinos. The move was in direct response to the expected increase in online betting activity as a result of the coronavirus pandemic and came into effect on July 1st.
In a routine investigation the SGA found that Videoslots had allowed its players to circumvent the cap by not factoring in reverse withdrawals (withdrawals that a player cancels). This created a loophole that then allowed players to deposit sums well in excess of the mandatory deposit cap.
During the investigation Videoslots noted that all players were greeted with a notification about the government-imposed deposit cap. However, the SGA, known locally as Spelinspektionen, took a dim view of this assertion making the following statement:
“With Videoslots’ interpretation of the provision, it would be sufficient for a licensee to state for the players that you have a deposit limit of SEK 5,000 per week for commercial online gaming, no matter how much money can be deposited in practice and in different ways and be used for games on commercial online games. Spelinspektionen does not share this assessment.”
The SGA immediately issued an injunction to Videoslots compelling the company to rectify the situation. In addition to the injunction, Videoslots will have to pay a fine of SEK 250,000 every week until the change to reverse withdrawals has been implemented.
Videoslots has argued that the new restrictions contravene EU laws on fair trading but the SGA has refuted those claims. The SGA has since stated that the freedom to offer services within the EU does not mean that those services cannot be restricted by the government. This is especially true with regards to restrictions that protect the public.
While some expected the iGaming provider to be hit with a warning, the SGA felt that the infraction was more than a mere oversight and therefore warranted a penalty.
This is the third time the SGA has fined an operator over a deposit cap violation since the law came into effect in July. In December of 2020, the regulator fined both Spooniker and ATG after discovering loopholes that also allowed their players to circumvent the deposit cap. Both were fined SEK 1m for every week that the loophole remained in place.
Despite strong opposition from iGaming providers in Sweden, the deposit cap is likely to stay in effect until July of 2021.