Swedish regulator revokes Global Gaming licence

17 June 2019

Swedish gambling regulator Spelinspektionen has revoked Global Gaming's operating licence after discovering “serious deficiencies” in business practices, including failings related to responsible gambling and anti-money laundering measures.

SafeEnt, the holding company of Global Gaming, must now cease Swedish operations immediately. It had been running both its Ninja Casino and Spellandet.com iGaming brands via online casino and sports betting licences issued in December 2018.

In its assessment, the regulator highlighted numerous breaches of regulations, based on the activity of ten players in particular. Global Gaming provided data to Spelinspektionen as part of the investigation process.

The ten players in question were found to have spent significant sums via Global Gaming’s brands, without any intervention by the operator to determine the source of their funds or to address their high levels of spending.

Swedish law states that players must set deposit limits, while all licensees are required to contact customers who set a monthly limit in excess of SEK10,000 (£838/€940/$1,053).

However, data supplied by Global Gaming showed none of the ten customers were contacted, while two players lost between SEK50,000 and SEK1.1m in the space of a week.

One customer in particular contacted the operator to request a monthly deposit limit of SEK30,000, only to be later told this would be set at SEK40,000. The player was then able to make deposits totalling SEK250,000 between January 19-25.

Global Gaming admitted it did not have any deposit limit active until January 14 and on this date, introduced a flat monthly limit of SEK8,000. However, this meant all limits previously specified by players were reset and that the players were forced to manually change these again.

The regulator said Global violated a number of regulations, including Chapter 14 Section 7 of the Games Act, as well as Chapter 11 Section 3 and 5 of the Game Ordinance, and Chapter 9 Section 10 of its own regulations and general advice.

Spelinspektionen has also noted failures in terms of duty of care whereby licensees must protect players against excessive gambling and help them to reduce their gambling when there is reason to do so.

In its assessment, the regulator said Global Gaming did not contact any of the ten  customers about their gambling habits, adding that four of the players opted to self-exclude via the Spelpaus national register after the analysis period.

Citing one customer in particular, the player started out with an average stake of SEK14 and total deposit of SEK55,000 for the month, but this then escalated to average wagers of SEK1,900 and deposits exceeding SEK500,000. At one time, the customer played for 20 hours and made a loss of almost SEK300,000.

While Global had set out a plan of action for dealing with problem gamblers that identified higher deposits and excessive playing time as risk indicators, the regulator said the operator failed to follow this plan.

“Spelinspektionen finds it remarkable that SafeEnt has not taken any measures related to the duty of care despite the customers’ exceptionally high deposit limits combined with the extensive gaming,” the regulator said.

“All customers in the review lost between SEK240,000 and SEK 1.1m for one month.”

The assessment also highlighted flaws in the operator’s  anti-money laundering measures. In particular, the regulator noted, it had failed to carry out a general risk assessment of its business, as required by the Swedish Money Laundering Act.

Spelinspektionen said that by lacking a general risk assessment, it would be unable to take appropriate measures to reduce the risks of money laundering using its products and services. This placed the operator in breach of Chapter 2 Sections 1 and 2 of the Money Laundering Act.

In addition, Spelinspektionen has said Global Gaming failed to carry out proper checks on customers to ensure they are not using its service for money laundering.

The regulator noted that high amounts deposited and wagered by the ten customers should have prompted the operator to investigate these players and establish the source of their funds. Failure to act properly in this area amounted to a breach of Chapter 2 Section 3 of the Money Laundering Act, the regulator said.

Global was also found to have failed to follow rules on customer awareness. Swedish licensees are required to establish a relationship with players that deposit amounts exceeding SEK2,000.

According to Spelinspektionen, it was impossible for the ten customers in question to spend so much for entertainment purposes only. The regulator said that despite this, SafeEnt did not collect enough information on the players to establish where the funds have comes from.

“Overall, Spelinspektionen finds that SafeEnt did not have sufficient customer knowledge regarding any of the ten audited customers,” the regulator said. “Despite the customers’ extensive gambling, the company did not check whether the customers have had the means to play to the extent that has been done.”

Spelinspektionen also identified failings in terms of bonuses. Licensed operators can only offer bonuses to players when they first sign up to use their services.

However, Global Gaming was found to have been running a number of initiatives that placed it in breach of these regulations, including weekly cash drops, daily slot tournaments, mystery prizes and random sweepstakes.

“Spelinspektionen’s assessment is these are discounts and financial incentives that are directly linked to the game and thus are bonuses,” the regulator said. “The campaigns provided by SafeEnt were both unauthorised bonus offers and lotteries, which is a form of gaming that is not covered by the company’s commercial online gaming licence.”

This ultimately saw Spelinspektionen revoke its licence, noting that the standard of player protection measures it asked of its licensees was “virtually non-existent” in Global Gaming’s Swedish offering.

“Due to the fact that the company has not fulfilled what is required regarding the requirements for duty of care and deposit limits, it has violated some of the most central parts of the game law which are aimed at protecting the player against excessive gambling,” Spelinspektionen explained.

“SafeEnt has described what measures it intends to take to correct the deficiencies, but the Spelinspektionen considers that the measures are not sufficient, and notes that SafeEnt lacks understanding of important parts of the regulations that govern the operations.”

Trading in Global Gaming's shares on the Nasdaq OMX Nordic Exchange has since been halted.

Image: Max Pixel