Videoslots ordered to pay £942,670 in Sweden

Spelinspektionen has imposed a sanction fee of SEK 12 million (£942,670/€1.1 million/$1.3 million) on Videoslots for failing to adequately address excessive gambling in Sweden.

In conjunction with this financial penalty, Spelinspektionen also issued a formal warning to Videoslots, citing violations of the duty of care rules as specified in Chapter 14, Section 1 of Sweden’s Gambling Act.

The investigation, initiated by Spelinspektionen in the spring of 2024, aimed to evaluate Videoslots’ compliance with its legal obligations to protect vulnerable players.

Upon thorough examination of the company’s procedures, Spelinspektionen determined that Videoslots had not implemented sufficiently effective measures to mitigate excessive gambling, nor had it responded in a timely manner to identified risks.

“The violation is regarded as serious, given its detrimental impact on individual players who incurred substantial financial losses within a short span,” the regulator confirmed.

“Consequently, the company will receive both a warning and a fine,” the statement concluded.

Why Was Videoslots Sanctioned?

In December, Spelinspektionen provided a preliminary assessment to Videoslots, asserting breaches of duty of care. Videoslots, however, refuted these claims, stating it had invested significantly in compliance systems and personnel.

The regulatory body analyzed data from twelve customers over a three-month span, while Videoslots contended that this timeframe was insufficient for evaluating long-term customer behavior.

Utilizing an automated monitoring system, Videoslots has procedures in place to identify at-risk behavior, which are triggered when specific risk indicators are met. Notably, the operator also restricts customer deposits once certain thresholds are reached.

However, Spelinspektionen’s findings revealed that twelve customers were identified as engaging in excessive gambling, and that Videoslots’ efforts to intervene were inadequate.

“Videoslots failed to assist customers in curbing their gambling when there were clear indicators to do so,” Spelinspektionen pointed out.

“The overall weaknesses in the company’s duty of care practices were characterized by ineffective measures, insufficient follow-up on those measures, and delayed responses to mitigate identified risks,” the report added.

The regulator highlighted that, while their system identified three customers for problematic gambling, these individuals had already been engaging in high levels of gambling for nearly three months before the company reached out.

Although Videoslots made contact with these customers toward the end of the observation period, the communication strategy included several pop-up notifications and email messages, as well as unsuccessful attempts to conduct direct care calls, which proved ineffective in changing gambling behaviors.

Data Protection Regulations

Videoslots argued that it was constrained by data protection regulations when assessing player risk levels, claiming restrictions in the Gambling Act limited its access to personal data regarding player health and financial status.

Spelinspektionen contested this assertion, stating, “The Data Protection Regulation does not exempt the company from fulfilling its regulatory responsibilities concerning the duty of care.”

Of the twelve players reviewed, five were identified as young customers, prompting Spelinspektionen to note this as a significant aggravating factor.

“As outlined in the Swedish Gambling Authority’s guidance on duty of care, this demographic is particularly vulnerable and requires enhanced protective measures,” Spelinspektionen advised.

Mitigating Circumstances

While Spelinspektionen acknowledged that Videoslots had cooperated throughout the investigation, it stressed that such cooperation is a standard expectation for licensed operators.

In response to the findings, Videoslots undertook revisions to its processes. These enhancements included optimizing the monitoring and assessment mechanisms for excessive gambling.

“The Swedish Gambling Authority believes that these corrective actions empower the company to better monitor and, if necessary, impose restrictions on customers’ gambling activities,” Spelinspektionen commented.

Due to the operator’s prompt actions, the regulator determined that a warning and the imposed sanction fee were appropriate, without necessitating a review of Videoslots’ operating license.

Earlier in 2023, Videoslots faced another penalty in Sweden for breaches related to anti-money laundering (AML) and counter-terrorism financing laws, incurring a fine of SEK 9 million (£663,575/€760,000/$808,809).