SGA imposes fine on Yggdrasil for supplying software to unregulated entity

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SGA

The Swedish Gaming Authority (SGA) has imposed both a monetary fine and an official notice on Yggdrasil following an investigation initiated in January 2024. The inquiry involved scrutinizing the websites of various operators who were prohibited from conducting gaming activities within Sweden. Yggdrasil was found guilty by the oversight body of providing its services to one such operator lacking local licensing or permission to operate in Sweden since October 2021. Yggdrasil claims it promptly rectified these oversights on January 23rd and ceased supplying gaming software to operators without the necessary Swedish certification. The service provider attributed the unauthorized provision to a contract violation by a partnered reseller. While SGA commended Yggdrasil’s immediate action in removing their games and digital assets from the non-compliant website, they categorized the breach as “severe.”

Penalty charges are determined based on a company’s turnover in the preceding financial year, ranging from a minimum of SEK5,000 to a maximum of 10% of the turnover. SGA estimated Yggdrasil’s net sales in 2023 to be around €514,566, corresponding to a turnover of roughly SEK5.8m, resulting in a maximum penalty of SEK580,000. However, in this case, the regulator settled for a fine amounting to SEK300,000.

The introduction of mandatory B2B licensing, effective from July 1st, 2023, requires any business intending to supply gambling software to possess a B2B licence as per the Swedish Gambling Act. The amendment prohibits companies with a gaming software licence from producing, delivering, installing, or modifying gaming software for any party lacking the required Swedish licence. This requirement aims to bolster the regulated market and deter illegitimate gambling activities. Yggdrasil holds the dubious distinction of being the first company penalized under the revised B2B licence regulations, as confirmed by news.apacaff There are expectations within the industry that more companies may face similar actions in the near future.

Mandatory B2B Licensing

Effective from 1st July 2023, any business intent on supplying gambling software must possess a B2B licence, as mandated by the Swedish Gambling Act.

The amendment stipulates that companies owning a gaming software licence are prohibited from “producing, delivering, installing or modifying” gaming software for any party that does not possess the required Swedish licence.

The inclusion of a B2B licence requirement was necessary with a view to boost the regulated market and deter illegitimate gambling activities.

Yggdrasil has the unsavoury distinction of being the first company to be penalized under the revised B2B licence regulations – a fact confirmed by news.apacaff

Expectations are high that more companies may come under the scanner, as murmurs within the industry suggest a surge of similar actions in the near future.