Sweden’s Administrative Court in Linköping has reduced a fine imposed on Videoslots by the gambling regulator by SEK5m (£359,797), claiming Spelinspektionen’s ruling was “unjustified and disproportionate.”
The court also said there was a “lack of logic” to how the regulator chooses the size of its penalties.
Spelinspektionen fined Videoslots SEK9m (£647,636) in October 2023, citing breaches of the Money Laundering Regulations. But the fine has now been reduced to SEK4m (£287,857).
The regulator said the igaming business failed to take adequate customer due diligence measures and failed to retain data.
Spelinspektionen pulled into question the gaming activity of 10 Videoslots customers. But the court said of those 10 customers, only four met Videoslots’ criteria for high-risk customers with regard to money laundering and terrorist financing.
The regulator did not raise concerns about how Videoslots categorises its customers by risk level, the court said, meaning Videoslots had “no obligation” to verify the source of funds for six of the 10 reviewed customers.
“An evaluation of whether the violations alleged by the Swedish Gambling Authority are serious and systematic must consider all relevant circumstances. Despite this, Spelinspektionen has simplified and generalised its review, choosing to disregard a number of relevant factors,” the court said, noting the regulator has only “solely focused” on gross deposits.
“How Videoslots handled these customer cases cannot form the basis for any conclusions about Videoslots' systematic efforts to combat money laundering and terrorism financing,” it added.
“There is a lack of logic in how Spelinspektionen determines the size of sanction fees for alleged violations of the PTL (Gambling Act). In cases where the violations have been more egregious, lower sanction fees have been imposed.
“Based on Spelinspektionen's previous decisions in similar cases, it is impossible to discern how the authority assesses the size of sanction fees.”
