Last September, several regulated operators in Sweden complained that a financial services company that offers next-gen open banking payments and payouts, Finshark, had facilitated a series of money transfers between consumers and unlicensed operators in the country.

A few of the worried operators carrying a license went further and asked the country’s expert authority in gambling and lottery, the Swedish Gambling Authority (SGA), to perform a careful assessment in light of additional similarities to a directive from roughly four months ago. 

The said directive convinced the provider of instant bank payment solutions that seamlessly integrate into existing systems, Zimpler, to stop providing a similar service to operators.

Things Have Gotten Worse 

As it appears, the gambling industry in Sweden does not have any good news to announce regarding the evolution of things. 

On the contrary, problems are not only persisting, but they have gotten worse in the context of an extra pay-and-play feature being allegedly added to the list. 

The primary allegation concerns a series of casino websites that are under the ownership of Infiniza Ltd, which is a Malta-based company that runs under a license issued by the prestigious Malta Gaming Authority in 2018. 

According to screenshots courtesy of NEXT.io, Swedish games are able to sign in using Swedish mobile phone numbers and complete deposits via the national identity verification system BankID with a number of banks in the country. 

The list includes Handelsbanken, Nordea, and Swedbank. The deposit’s recipient is instant payment provider Krofort which does not showcase any information regarding a license. 

Allegedly, Infiniza is the sole gaming operator in Sweden with online casino brands connected with both Krofort and Finshark. This would give it a competitive edge over licensed operators.

In 2023, regulated providers emphasized that operators in the grey market have the advantage of being able to use these types of fast payment services which are expected from domestic players looking for fast cashouts. 

The same operators raised concerns regarding the reasons why the SGA has failed to take any course of action as of yet.

The SGA Can Block Payments 

At the start of March 2023, the regulator announced it would clamp down on business-to-business suppliers offering their products to unregulated operators targeting Swedish players while failing to comply with the regulations. 

In spite of the fact that payment provision was not part of the newly installed regime, the SGA was given the right to block payments. 

In July, the authority instructed Zimpler to stop offering payment solutions via BankID to operators functioning without a license. 

Zimpler followed suit and an end to its ties with gaming companies licensed in the European Union that did not carry a Swedish license while deciding to also appeal the decision on the grounds that it affected it while raising legal problems that required clarification for the well-being of the industry.

Earlier this week, the SGA banned Smein Hosting and True Polygon Entertainment at the end of an investigation that showed they were targeting domestic players in Sweden without authorization. 

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The CEO of Playtech, Mor Weizer, has criticized publicly listed rivals for conducting business in what he referred to as “black markets.” In a recent interview for the Evening Standard, Weizer expressed his frustration with highly valued companies that, despite seeing substantial revenue growth and soaring share prices, operate in countries where online gambling is illegal.

Playtech Stresses Commitment to Regulated Markets Amidst Rivals’ Unregulated Ventures

While Weizer did not name specific competitors, he highlighted that some of them have experienced astronomical growth while reducing their reliance on regulated markets. He emphasized Playtech’s commitment to growing in strictly regulated markets and voiced concern about rivals using funds generated from unregulated markets to penetrate regulated ones. He even mentioned that some operators are present in markets that are on the US sanctions list.

Playtech itself operates in some Asian and Latin American countries where online gambling is unregulated but not explicitly prohibited. However, the company has experienced a decline in revenue from these markets in the first half of the year as it shifts its focus towards countries with fully regulated betting environments.

Weizer emphasized that Playtech’s primary focus is on regulated markets, where they have achieved double-digit growth. He also pointed out that Playtech’s shares trade at a lower multiple than some of their rivals listed outside of London.

Despite concerns about Playtech’s valuation, Weizer commended London investors for their sophistication and understanding of the company’s strategy, particularly regarding its dedication to strictly regulated markets.

Playtech Achieves Impressive 8% Year-on-Year Revenue Surge in H1 2023

Playtech reported robust financial performance in the first half of 2023. The company revealed an 8% year-on-year increase in revenue, amounting to €859.6 million ($919.9 million) during the six-month period ending June 30, 2023. This impressive growth was attributed to the strong performance of Playtech’s B2B division, which includes Snaitech, HAPPYBET, and Sun Bingo, generating €334.5 million ($358 million) in revenues, a 7% uptick from the previous year.

In addition to their B2B success, Playtech experienced notable growth in the Americas, with revenues soaring by 43% to €99.7 million ($106.7 million), primarily driven by their expansion in Caliente and partnerships with multiple operators across various states in the United States.

Despite challenges in certain European markets, Playtech managed to achieve a 5% revenue increase to €96.6 million ($103.3 million) in Europe, excluding the UK. However, in the UK, revenue dropped by 2% to €62.9 million due to proactive affordability checks. Notably, the company’s B2C segment saw remarkable growth, with a 9% increase in revenue to €532 million ($569.5 million), supported by Snaitech’s strong performance in Italy and the pent-up demand following the FIFA World Cup.

Playtech’s CEO, Mor Weizer, expressed optimism about the company’s future, citing expansion plans in the United States, key partnerships, and their strategic agreement with Hard Rock Digital. Weizer also highlighted the resilience of Playtech’s balance sheet, low leverage, and strong cash generation, further bolstering confidence in the company’s prospects.

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The Betting and Gaming Council (BGC), the single industry body of the gaming and betting industry in the UK, released data from a new study that probed what may be the possible outcome of tight restrictions for the gambling market in the country.

The study, organized by YouGov for the BGC, uncovered that 79% of the gamblers feared that enhanced restrictions may result in people switching to unregulated, black-market gambling operators. Some 70% of the participants in the new study admitted that if they encounter a request for sharing “private financial documents” as a requirement to place a wager, they are likely to select a different bookmaker.

The Council reiterated data from a previous survey from RacingTV which uncovered that 15% out of 3,500 gamblers admitted that they knew someone who uses an unregulated online gambling company. The same study found that some 80% of the respondents disputed mandatory spending limits imposed by bookmakers.

Non-intrusive Gambling Checks Are Needed

BGC’s CEO, Michael Dugher, explained that the recent research by YouGov once again raises the concern that the proposed changes to the regulated gambling sector are pushed forward by people who haven’t wagered. At the same time, he said that the BGC supports “genuinely non-intrusive checks, which use technology to carefully target and protect the tiny minority of vulnerable punters.”

“This research is the latest in a series outlining the genuine concerns of millions of ordinary punters who feel that the people making decisions about the future of betting are out of touch and have never had a bet in their lives.“

Michael Dugher, CEO of the BGC

Dugher also acknowledged that blanket affordability checks and intrusive restrictions for the sector are likely to face fierce rejection by gamblers. Moreover, he warned that such efforts may even push gamblers to the unregulated, black-market operators that do not offer any safe gambling tools and do not pay taxes or support the economy.

“Ministers should listen to the millions of punters enjoying Cheltenham rather than pander to a naive and snobbish minority of anti-gambling prohibitionists,“

added Dougher

Data from the latest study emerged ahead of the biggest horseracing week, the Cheltenham Festival. Starting next week, the Festival is expected to see 280,000 attendees and generate some £274 million ($329.4 million) for the local economy. Keeping in mind the popularity of the event, during the four days of racing, some £1 billion ($1.2 billion) is expected to be wagered.

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