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Sweden rethinks licence requirements following court defeat

| By Richard Mulligan
Sweden’s gambling authority (Spelinspektionen) has revoked its legal position on the importance of negative equity in licence reviews, following its court defeat in a case brought by gaming group Avento.

Spelinspektionen said the legal position it outlined in October 2020 has been cancelled in light of December’s judgment from the Linköping administrative court, which saw Avento’s licence renewal rejection overruled.

The owner of Frank Casino and SlotsV obtained a three-year licence in December 2019, but its renewal application in December 2022 was rejected by the regulator due to its negative equity in the first two years of this period. However, the court ruled that the rejection should be overruled as Avento was now operating in a positive financial position and that negative equity did not necessarily mean a business was at risk of not fulfilling its licence requirements.

Despite the court defeat and change to its policy, Spelinspektionen said it continues to believe that a negative equity usually means that a licensee’s suitability requirement cannot be considered fulfilled, suggesting negative equity would continue to work against applicants even if they are part of a group.

It said: “For applicants who are part of a group, in some cases the group’s combined capital strength can be taken into account. This applies to both first-time applications and applications for renewed licences. A prerequisite, however, is that the group’s resources are relevant and are actually at the applicant’s disposal, which can be shown, for example, through a capital guarantee.”

It added: “The Swedish Gaming Authority believes that a capital guarantee from a private person cannot be accepted as a starting point in view of the difficulties in obtaining a reliable picture of a natural person’s financial position.

“The extent to which the group’s capital strength can be taken into account and what capital strength is required for the conditions for a licence to be considered fulfilled will be decided in each individual case.”

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