The largest turnover-based penalty fee imposed by Sweden’s regulator, Spelinspektionen, has been reduced after a Court ruling.

In June of last year, Kanon Gaming Ltd, a Malta-based operator also licenced in Sweden, found itself in the crosshairs of Spelinspektionen as a result of duty of care deficiencies.

What followed was the largest penalty fee based on a company’s net turnover ever issued by the regulator – a total of SEK 7m (£554,000). Kanon later contested the decision in Sweden’s Administrative Court.

Following a review, the Court deduced that failures were indeed present, but “not of such a serious nature” to beckon the size of the initial initial penalty. Instead, the sum was brought down to SEK 4.8m.

Part of the reasoning behind the Court’s ruling was that Kanon showed proactiveness to address the identified issues, maintaining a close collaboration with Spelinspektionen in doing so.

What’s more, the Kanon shortcomings listed by Spelinspektionen were found to have been cleared by the operator in 2023, prior to the regulatory repercussion. 

“The company has had routines for contact with players even before the Swedish Gambling Authority began its supervision and has monitored the players’ communication with customer service in order to detect excessive gambling,” the Administrative Court said in its statement.

“The company is a small player in the market and has made a loss in recent years…A high penalty in this case is contrary to the objectives of the Gambling Act and is disproportionate.”

Regardless, the Court assured that the reduced SEK 4.8m penalty is still in accordance with a proportionate punishment, taking into consideration the identified deficiencies and the period of time they have lasted.  

Kanon Gaming’s stance has remained unchanged throughout the ordeal, with the company stating that while it does not question Spelinspektionen’s findings of due diligence shortcomings, the initial penalty does not correlate with regulatory decisions on other similar cases.

Sweden has been putting its foot down recently when it comes to player protection, with the government putting plans in motion to amend the 2018 Gambling Act with additional measures against offshore operators.

The update will hit all unlicensed platforms with the full power of Sweden’s legislature if they are found to allow Swedish players on their platforms – even those which are not actively targeting the Swedish market.