Unlicensed Gambling Software Crackdown

Lately, the Swedish Gambling Authority, Spelinspektionen, has increased its war on the growing tide of gambling-related activities in the country. This has been done to ensure adherence to local rules and the integrity of the legally functioning gambling market. The latest activities along this line are the moves against Hacksaw Studios AB and Panda Bluemoon Ltd.

Regulatory Actions Against Hacksaw Studios AB and Panda Bluemoon Ltd

On March 22, 2023, Spelinspektionen granted a license to Hacksaw Studios AB to develop, supply, install, and modify game software that could be used for the games offered by online gambling operators. The license was valid from July 1, 2023 to June 30, 2028. The same Spelinspektionen found that Hacksaw Studios had failed to follow its obligations under the license in that it offered game software to two operators that had no valid Swedish gambling licenses.

According to the Spelinspektionen, geoblock filters had been installed and used so that the location cannot be used for a customer who is licensed. That thus established that Hacksaw Studios had broken Chapter 11, section 6 e of the Swedish Gambling Act, which states that: A licensee shall not manufacture, offer, install or modify game software for an operator who does not have a license in accordance with Chapter 2 of the Act.

The Swedish regulator, therefore, issued a warning in addition to a fine of 2,600,000 SEK (about €226,000) in this regard. As for Panda Bluemoon Ltd, the regulator found that it distributed gaming software into the country to two non-licensed operators. This has meant the same warning and a penalty fee of 700,000 SEK (about €61,000). These actions underline the commitment of the Swedish regulator to enforcing compliance and deterring unlicensed gambling operations.

General Implications: Comparing Hacksaw Studios and Panda Bluemoon Ltd to SOFTSWISS

While Hacksaw Studios and Panda Bluemoon Ltd have been hit with serious fines for their transgressions against regulatory authorities, they are far from the only unlicensed gambling software providers on the market. Malta-licensed SOFTSWISS has also been named in connection with providing gaming software and systems to unlicensed operators, such as Loki Casino and Weltbet Casino. That is a broad issue comparison to the gambling software industry. It is important to acknowledge that the regulatory optima and enforcement are at a huge level depending on the jurisdiction.

SOFTSWISS, holding a MGA license, has been caught red-handed themselves. The company has been revealed to provide their services to operators that do not have licenses in multiple jurisdictions. This fact comes in stark conflict with the very essence of the regulatory frameworks set in place to guarantee that the activities in gambling are legal and fair.

While Spelinspektionen acted decisively, MGA has, at the time of writing, been very quiet about the sanctions imposed on SOFTSWISS, and similarly quiet in relation to other providers, including Pragmatic Play, that are under their license and have been outed for supplying software to unlicensed operators.

We contacted SOFTSWISS and the following companies during the month of March 2024, asking them for a statement in regards to their association with Loki and Weltbet Casino. So far, we did not even receive an acknowledgement from their legal or PR departments.

In total, we asked 15 questions and NONE of the companies was ready to comment, including SOFTSWISS: Pragmatic Play, Novomatic, Red Tiger Gaming, Relax Gaming, Nolimit City, Endorphina, Skywind Group, Evolution, Play’n GO, ELK Studios, Betsoft, Microgaming, Spinomenal, BGaming, Leap Gaming, BTG Gaming, Thunderkick, Quickspin, Wazdan, NetEnt, Gamomat, Bragg, Habanero Systems, Fazi, Just For The Win, Evoplay, Booming Games, GameArt, Tom Horn Gaming, Playtech, Yggdrasil Gaming, Fugaso, Mascot Gaming, Blueprint Gaming, Ruby Play, Golden Rock Studios, Foxium, Lightning Box Games, Hacksaw Gaming, Stakelogic, Eyecon, SmartSoft, Stormcraft Studios, 1X2 Network, Playson, BF Games, G Games, Seven Springs, PG Soft, Push Gaming, Gold Coin Studios, Slingshot Studios, NTL Gaming, Arcadem, and ESA Gaming.

Need for Stricter MGA Enforcement

Given disparities related to MGA’s regulatory enforcement on paper, the Malta Gaming Authority should be more stringent. It should consider imposing significant fines on the likes of SOFTSWISS and the other companies above, like the penalty imposed by Spelinspektionen. If these measures are taken, then such enforcement actions against unlicensed clients for instance would provide a significant deterrent to the supply of gaming software to unlicensed operators, as well as strongly reinforce to the wider industry the importance of compliance.

The MGA’s regulatory framework has to come up with more solid requirements to tackle the problems posed by the global character of today’s online gaming and betting sector. With the introduction of stiffer penalties and monitoring, the MGA would ensure that fully licensed software providers stay in line with the local and international requirements. This would both protect consumers and enhance market integrity.

Final Thoughts

The recent actions on Hacksaw Studios AB and Panda Bluemoon Ltd serve to underline strong public enforcement as a regulator in this delicate market of gambling. Definitely the perfect precedent for any software vendor looking into providing services to an unlicensed operator.

The same goes for regulators such as the Malta Gaming Authority. A ruling against such operators is merely enough to indicate that the MGA is fully committed to ensuring it strictly adheres to the stringent regulatory and protective measures enacted.

The online gambling market remains a fast-evolving one, and strong and consistent enforcement in all regions across the world will have to be a major component in the years ahead. Only through working together will we ensure that the integrity across the global gambling market is maintained to ensure the protection of every player’s experience.

FAQs:

What prompted the crackdown on unlicensed gambling software providers?
The increased enforcement by the Swedish Gambling Authority, Spelinspektionen, to uphold local regulations and the integrity of the gambling market.

What were the consequences faced by Hacksaw Studios AB and Panda Bluemoon Ltd?
Both companies received warnings and hefty fines for supplying gaming software to non-licensed operators in Sweden.

How did the actions against Hacksaw Studios and Panda Bluemoon reflect broader industry issues?
These cases highlight the widespread problem of unlicensed gambling software providers, emphasizing the importance of regulatory compliance.

What comparison is drawn between SOFTSWISS and the fined companies?
SOFTSWISS, despite holding an MGA license, has also been implicated in providing services to unlicensed operators, raising concerns about regulatory oversight.

What measures are proposed to improve regulatory enforcement by the Malta Gaming Authority (MGA)?
Calls for stricter penalties and monitoring to deter unlicensed gaming software providers and reinforce industry compliance.