Videoslots Slapped With a Massive Fine by Spelinspektionen

Article by : Milena Petrovska Nov 14, 2023

• 
• 

After several years of conducting an investigation, the Swedish Gaming Authority (Spelinspektionen) has issued a massive fine to Videoslots. The regulator set the penalty fee at SEK 9 million, which is about $810,000 or €762,000.

Videoslots Casino joined the regulated Swedish gambling market back in 2018 when it obtained its license on the 4th of December. Less than three years later, on the 2nd of November 2021, the Swedish regulator raised concerns regarding anti-money laundering (AML) and counter-terrorist financing (CFT) failures.

According to the investigation findings, the gambling company failed to meet the customer knowledge requirements imposed by the regulator. It was decided that the Malta-based operator has made “serious and systematic” failures in sensitive sectors.

Videoslots Gets to Keep Its License

A silver lining for the online casino group comes through the decision not to have its licenses suspended. Instead, Spelinspektionen went for issuing a final warning alongside the hefty penalty fee.

Investigation reports reveal that the Swedish regulator randomly chose 10 of the casino’s most valuable customers. The covered period ranged from 2019 to 2021 and revealed serious shortcomings regarding how the company tracked and analyzed spending. Per the reports, in all of the 10 cases, there were missteps from the operator’s side, especially when it comes to discrepancies between a player’s income and their gambling transactions.

An example was provided through a customer who was allowed to deposit over SEK 5 million (about €423,300) over the investigation period. The player’s income in the previous year of 2018, however, was only SEK 57,000 (€4,827). Over the two years, the customer had no issues uploading and withdrawing massive amounts of money and an initial risk was ignored.

This was only one example showing how Videoslots failed to acquire enough knowledge about its customers. As the regulator classified these violations as “very serious”, it was decided to issue one of the biggest penalties ever. According to the authority’s Money Laundering Act, the maximum fine for such offenses is €1 million, which would total to about SEK 11.80 million.

Weak Excuses and Failure to Actively Help the Investigation

Spelinspektionen said that Videoslots agreed to improve its operations and cooperated with investigators. Yet, it highlighted that the company failed to help the investigation actively and wasn’t proactive enough. It didn’t work hard enough to ensure that its operations weren’t being used for “money laundering and financing of terrorism”, the decision report stated.

Videoslots tried to excuse its shortcomings by claiming those customers didn’t represent the compliance level the company worked to achieve. Moreover, they stated that AML regulations demanded reporting suspicious activities rather than taking additional steps.

Still, the Swedish regulator stated several sections of the Money Laundering Act the Malta-based company breached.

Not the First Rodeo for This Duo

Going through the Spelinspektionen’s archives shows that this case isn’t the first one involving Videoslots. A press release dating back to the 26th of January 2021 reveals that Videoslots has been warned against allowing users to deposit over SEK 5,000 per week.

These limits were put in place during the COVID-19 pandemic in order to protect customers during daring times. The Swedish regulator discovered that the limits hadn’t been respected by Videoslots, which allowed users to make withdrawal reversals and disrespect the threshold.

At the time, Videoslots was just warned and threatened with a weekly fine of SEK 250,000. The gambling company avoided the penalty then but failed to do so now.