The Linköping administrative court in Sweden has significantly reduced a fine imposed on Videoslots by the country’s gambling regulator, Spelinspektionen. The penalty, initially set at SEK 9 million ($827,000) for anti-money laundering (AML) and terrorist financing violations, was slashed to SEK 4 million ($367,000) after an appeal by the online casino operator. However, Spelinspektionen’s warning remains.
The Observed Breaches Warranted a Smaller Fine
Spelinspektionen’s investigation into Videoslots revealed severe deficiencies in its AML controls. The regulator reviewed the activities of ten high-frequency, high-deposit players and discovered eight of them were able to deposit between SEK 1 million ($92,000) and SEK 5.5 million ($505,500) without sufficient scrutiny or queries about the source of funds.
The regulator found “serious and systematic deficiencies” in Videoslots’ oversight, leading to the hefty fine in 2023. Videoslots challenged the penalty, arguing that the investigation covered a limited and non-representative sample of players, which did not reflect the full scope of its AML controls. The operator admitted it made mistakes during the relevant period but said this was due to COVID-related disruptions and technical issues.
There is a basis for Spelinspektionen’s intervention through a warning and a penalty fee, but after an overall assessment, the administrative court determines the penalty fee to be SEK 4 million instead of SEK 9 million.
Spelinspektionen statement
In its defense, Videoslots pointed to corrective measures it has implemented since the investigation, including tripling its AML and counter-terrorist financing team. While the court agreed that Videoslots had committed serious breaches, it did not feel there was sufficient evidence to prove they were systematic. The penalty, therefore, was cut by more than half to SEK 4 million.
Videoslots Faces Another Penalty in the Netherlands
Spelinspektionen reacted positively to the court’s verdict, adding that the ruling reflected a more balanced view of the severity of the breaches. This case is not the only regulatory trouble in Videoslots’ recent history. Even though Kansspelautoriteit (KSA), the Dutch gambling authority, agreed to reduce Videoslots’ record-breaking penalty, the operator remains reluctant to pay.
Videoslots was penalized after, in April 2022, the KSA managed to gain unauthorized access to its website by pretending to be a German customer, then made a deposit and completed a wager. The operator claimed that the initial decision was prompted by “temporary and erroneous” site changes. Videoslots emphasized it had always intended to operate legally.
The reduction of fines in Sweden and the Netherlands raises broader questions about the proportionality of penalties imposed on gambling operators. It also underlines the importance of robust AML practices, particularly in a highly regulated sector where regulators and operators often clash over compliance interpretations.
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