Swedish Regulator Clamps Down on Unlicensed iGaming Operators

Unlicensed Skin Lotteries Under Scrutiny

Spelinspektionen’s latest enforcement action targeted two operators, Newera Frozen PTE Limited and Aprodi Limited, for their involvement in illegal “skin” lotteries. These lotteries, which revolve around the use of virtual items from video games known as “skins” as stakes, have been found to contravene Swedish gambling regulations due to their monetary value outside the gaming world.

The investigation revealed that Newera Frozen PTE’s Hellcase.com and Aprodi’s Key-drop.com were offering betting modes that allowed players to wager skins in hopes of winning more valuable ones. The regulator’s scrutiny extended to the marketing strategies of these sites, which relied heavily on user-generated content on popular platforms like YouTube and Twitch, raising concerns about the targeting of Swedish players.

Criteria for Identifying Targeted Content

Spelinspektionen has outlined specific criteria to determine whether content is aimed at Swedish consumers, including the use of the Swedish language, a .se domain, Swedish e-identification or payment services, and Swedish-language marketing materials. Both Hellcase.com and Key-drop.com were found to meet these criteria, prompting the regulator’s action.

In defense, Newera Frozen PTE argued that its loot box offerings did not constitute gambling and therefore did not require a license. However, the operator has since made adjustments to its site, removing Swedish text and the Trustly payment option in response to the regulator’s findings.

Galaktika NV Faces Ban for Targeting Swedish Market

The ban also extended to Galaktika NV, known for operating multiple iGaming sites, including Drip casino, for its unauthorized targeting of Swedish players. Despite Galaktika’s assertion that it did not intentionally target Swedes and that marketing was outsourced, Spelinspektionen ruled that the company’s use of Swedish affiliate marketing constituted targeting of the Swedish market, thus violating the nation’s Gambling Act.

This series of bans follows closely on the heels of significant fines levied by Spelinspektionen against major players in the Swedish iGaming industry. Svenska Spel Sport & Casino was fined SEK100 million for shortcomings in player safety measures, and Yggdrasil faced a penalty for supplying software to an unlicensed entity, signaling the regulator’s heightened focus on compliance and consumer protection.

Our Comment on the Article

Spelinspektionen’s recent actions against Newera Frozen PTE, Aprodi Limited, and Galaktika NV illustrate the regulator’s unwavering stance on upholding the integrity of Sweden’s online gaming sector. By enforcing the law against unlicensed operators and ensuring that gambling activities comply with national regulations, Spelinspektionen is not only protecting consumers but also maintaining a level playing field for licensed operators. This proactive approach to regulation is essential for the sustainable development of the iGaming industry, fostering a safe and responsible gaming environment for all stakeholders.