Swedish retail operator AB Trav och Galopp (ATG) has been served a SEK 3m (£236k) penalty two years after being cleared of wrongdoings.

In 2023, Swedish gambling authority Spelinspektionen leveraged the provisions set out in the Gambling Act to issue ATG a notice of breaching anti-money laundering and terrorist financing rules, constituting serious KYC breaches. 

“The Swedish Gambling Authority assessed that ATG had not worked sufficiently, proactively, and risk-based to ensure that the customer knowledge is up-to-date and sufficient to assess and counteract the risk of the company being used for money laundering and terrorist financing,” the gambling authority said at the time.

Because the regulator concluded that the failures were also systematic, the notice carried a SEK 6m penalty with it as well.

Seeking to amend the final ruling, ATG appealed Spelinspektionen’s decision to Sweden’s Administrative Court where it found success. The court overturned the regulator’s decision citing no grounds found to issue a sanction fee for the identified deficiencies.

Confident in its initial assessment, Spelinspektionen then decided to challenge the Administrative Court’s ruling by filing its own appeal, this time with the Swedish Court of Appeal.

This also proved successful, with the Court of Appeal overturning the Administrative Court’s decision and siding with Spelinspektionen on the grounds of AML breaches clearly present on ATG’s end.

The only thing that the Court of Appeal disagreed with Spelinspektionen, however, was that the violations have been systematic due to the limited number of affected customers – leading to the lesser sanction of SEK 3m.

It does not seem like the penalty fee will leave a visible dent in ATG’s financial standing given the company’s H1 performance. Although reporting a 5% YoY drop in revenue, net gaming income for the first half of the year stood at SEK 2.6bn (£190m), with operating profit at SEK 671m.