Swedish Operators Call for Regulations Regarding Payment Issues

In September of last year, several regulated operators in Sweden raised concerns about a financial services company called Finshark. They claimed that Finshark had facilitated money transfers between consumers and unlicensed operators in the country. These worried operators requested the Swedish Gambling Authority (SGA) to conduct a thorough assessment due to similarities to a directive issued four months prior.

The directive in question led Zimpler, a provider of instant bank payment solutions, to cease providing a similar service to operators. The gambling industry in Sweden has faced continued challenges, with the addition of an alleged pay-and-play feature worsening the situation.

The primary concern revolves around a series of casino websites owned by Malta-based company Infiniza Ltd, operating under a license issued by the Malta Gaming Authority in 2018. Swedish players were reportedly able to sign in using their mobile phone numbers and make deposits through the BankID system with banks such as Handelsbanken, Nordea, and Swedbank. The recipient of these deposits is Krofort, an instant payment provider that lacks information about a license. Infiniza is believed to be the only gaming operator in Sweden with online casino brands connected to both Krofort and Finshark, giving it an advantage over licensed operators.

Regulated providers have expressed concerns about unlicensed operators in the “grey market” having access to fast payment services, providing an edge over domestic players seeking fast cashouts. The SGA has been criticized for its inaction in addressing these concerns.

In March 2023, the SGA announced its intention to crack down on business-to-business suppliers offering products to unregulated operators targeting Swedish players. The authority was granted the power to block payments, despite payment provision not being initially included in the regulatory regime. In July, Zimpler was instructed to stop offering payment solutions via BankID to operators without a license. This decision led Zimpler to sever ties with EU-licensed gaming companies without a Swedish license, prompting an appeal on the grounds of legal implications for the industry.

Recently, the SGA banned Smein Hosting and True Polygon Entertainment after an investigation revealed that they were targeting Swedish players without authorization. This ongoing series of events underscores the challenges facing the regulated gambling industry in Sweden.