The Swedish Gambling Authority (Spelinspektionen) has issued an injunction to Videoslots after discovering it had breached deposit regulations.
Spelinektionen, which is responsible for regulating all online gambling in the country, issued the injunction this week along with a potential SEK 250,000 (Around £22,000) fine per week for failing to meet regulations.
According to the regulator, Videoslots failed to comply with the SEK 5,000 weekly deposit limit for online casinos, a controversial rule that was introduced back in July 2020 in response to the Covid-19 pandemic.
As reported by iGamingBusiness, Spelinspektionen discovered Videoslots’ failure to comply with regulations after carrying out inspections to all licensees to ensure they were complying to the deposit cap regulation. As part of its investigation, the regulator requested information on how each licensee has enforced its deposit cap.
Videoslots explained that it was “impossible” for users to log in without setting a deposit cap meeting Spelinspektionen’s regulations. Then, after providing information on its reverse withdrawal service, Spelinspektionen discovered that users could deposit more than the imposed SEK 5,000 cap in a week by reverse withdrawals, a feature Videoslots claims only exists due to “player requests”.
Although Spelinskeptionen noted that Videoslots Casino followed all other regulations, the regulator said that allowing customers to reverse their withdrawals allows them to circumvent the law, breaching regulations.
In a statement reiterating Videoslots’ requirement to enforce the deposit cap, Spelinspektionen stated that the casino’s current method of limiting customers was nothing more than a warning, saying:
“With Videoslots’ interpretation of the provision, it would be sufficient for a licensee to state to players, ‘You have a deposit limit of SEK 5,000 per week for commercial gaming,’ no matter how much money can be deposited and used for online gaming in practice. Spelinspektionen does not share in that assessment.”
Videoslots argued that Spelinspektionen’s deposit cap violated EU law and announced plans to pursue legal action against the regulator over the rules. In response, Spelinspektionen stated that the ability to offer services within the EU could be restricted in order to protect the public.
Spelinspektionen then issued a final ruling, stating that although the violation warranted more than a warning but wasn’t serious enough for license suspension. In its report, obtained by CasinoBeats, the regulator said:
“Spelinspektionen’s assessment as above is that Videoslots Ltd violates sections three and six of the Temporary Ordinance regarding deposit limits. In view of the fact that these are gambling liability provisions that aim to protect players against particularly risky forms of gambling, this is a violation that is normally to be regarded as serious.
“In the present case, however, these are temporary provisions which the licensees have also had to adapt to in a very short time by making the necessary adjustments to their existing systems. According to the Spelinspektionen, this means that the violation in an overall assessment is not to be regarded as serious, but neither as minor nor excusable.”
In line with its rulings, Spelinspektionen issued the injunction, ordered Videoslots to remove reverse withdrawals and follow regulation, and warned that failure to comply would lead to a heavy SEK 250,000 weekly fine. It also instructed Videoslots to inform Spelinspektionen when the necessary changes have been made.
In response to Spelinspektionen’s ruling, Videoslots has called for “greater clarity” for operators and described Spelinspektionen’s temporary deposit cap limits as “unreasonable and unjustifiable”, and claimed they could push consumers into playing at unlicensed and unregulated websites.
Acknowledging Spelinspektionen’s report and the regulator’s confirmation that Videoslots had followed all other regulations, the online casino operator called for more clarity over rules to help operators remain responsible and to ensure that they do not unknowingly breach regulatory code.
A spokesperson for Videoslots said: “Videoslots notes that decision made by the Swedish regulator and is pleased that it confirms compliant implementation of the bonus, deposit and time limits put in place by the Swedish government to counter perceived increase of risks during the Covid-19 pandemic.
“According to the decision, these regulations also prohibit the withdrawal-related functionality which remained in question. We will comply and remove this functionality, having already offered to do so during the assessment.”
They continued: “We do not, however, believe that we were in breach of the Covid-19, or any other regulations, and call for greater clarity to aid responsible operators like ourselves. Furthermore, we maintain our position that these regulations are both unreasonable and unjustifiable.
“Not only are they contradicted by facts and damaging to licensed operators, they are also completely counterproductive to their declared aim of player protection and push players into the arms of illegal operators. We will therefore continue to challenge these regulations.”
As we reported last year, Spelinspektionen’s injunction to Videoslots comes after the regulatory body penalised several other operators over its controversial Covid-19 deposit cap. At the end of 2020, Kindred brand Spooniker and operator AB Trav och Gallop (ATG) were fined over loopholes which allowed players to go over the required deposit cap.
Reports state that players at the aforementioned operators were allowed to set high deposit limits, make a deposit, and then lower their limits to play casino games with a higher deposit of more than the required SEK 5,000. As a result, both operators were fined and ordered to follow regulation.
Spelinspektionen’s deposit cap has been heavily criticised since its launch in July 2020. When introduced, the deposit cap was originally set to last until the end of 2020, but it was recently extended through to June 2021.