Earlier this month Spelinspektionen warned Zimpler it faces a hefty fine if it fails to stop working with offshore brands. This fine, the regulator said, could be as high as SEK25.0m (£1.9m/€2.2m/$2.4m) if it does not comply.
In an injunction ruling, Spelinspektionen said it is taking action due to Zimpler using BankID for transactions with unlicensed sites. BankID is an e-identification service only used by Swedish customers.
The use of BankID for transactions proved the operators in question were illegally targeting Swedish players, the regulator said. It did not disclose the identity of the operators, saying it launched an investigation after an anonymous tip.
Zimpler has until 31 July to comply and end activities with the operators in question.
Zimpler hits back
In response, Zimpler argued it already made clear its intention to end business relationships with the operators. It announced these plans back in May, over a month before the Spelinspektionen warning.
Zimpler expects to complete the process by the third quarter. Since the regulator set the 31 July deadline, it aims to accelerate the process.
The provider said it previously proposed changes in law to stop unlicensed sites from operating in the market.
This included a proposal for Swedish consumers to be barred from games licensed outside the country through IP address blocking. Zimpler also put forward the idea of B2B licences being introduced for payment service providers.
However, the government has not opted to implement these measures. Licences for software providers were introduced in March, however.
“Zimpler supports Spelinspektionen’s mission to strengthen the Swedish licensing system and consumer protection in the igaming market,” Zimpler CEO Johan Strand said. “We want to promote responsibility and compliance in the gaming industry and have for a long time invested in product development in this area.”
Appeal will carry on regardless
While ending the business relationships would satisfy the regulator’s demands, Zimpler will proceed with a formal appeal.
Zimpler said the decision is “misdirected” and “incorrect” and could have far-reaching consequences across the market. The provider added that it impacts its own business negatively as its commercial ability to act is limited in a way that is not supported by law.
Setting a precedent for other providers
The supplier also flagged a number of legal issues relating to the case. These need to be clarified in court so that other providers can conduct business without risking interventions from the authorities, it said.
It queried whether providing services to an unlicensed gambling company, considering gambling as a pastime is legal, could be considered an illegal activity.
“The appeal is also a measure to ensure legal certainty in companies’ relations with the authorities,” Strand said.
“Companies must be able to plan and conduct their operations with predictable application of laws and regulations. It is a fundamental principle – both in Sweden and within the EU.”
Spelinspektionen is yet to respond to Zimpler’s appeal.