The Swedish regulator supports an extended ban on credit gambling but asks for clarity on rules and regulations

The Swedish gambling regulator Spelinspektionen has expressed support for a proposed comprehensive ban on credit gamblingsimultaneously calling for greater transparency regarding the new regulations.

In accordance with applicable law, Licensed operators are no longer allowed to offer or grant gambling loans. However, the proposal of the Ministry of Finance in February seeks to extend this prohibition by preventing state operators and gambling agents from processing deposits or wagers financed by credit, including credit cards.

The proposals also highlight the need for licensees to implement Duty of care measures designed to discourage excessive gambling. Spelinspektionen would be empowered to establish requirements for these action plans.

Spelinspektionen, although largely supportive, expressed reservations about these proposals. An important issue is the exclusion of certain pages, such as: non-profit associations engaged in the sale of bingo games or lotteries, from the prohibition.

These entities do not accept payments by bank cards, but sell tickets via digital channels. The regulator is calling for measures to ensure that these transactions are not financed by credit cards or third-party loans.

“The memorandum lacks an impact analysis that this situation may be related to public benefit lotteries,” Spelinspektionen said.

The regulatory authority also drew attention to the ambiguity of the proposed regulations, especially regarding the interpretation of the concept of “credit”. The current proposals refer to an extended ban on loans to consumers who use the funds in their account to gamble. Spelinspektionen noticed this a loan linked to a bank account is also considered an overdraft.

This may mean license holders and gambling agents please ensure that your credit space is not used for debit card payments. However, the proposals do not impose investigative obligations on licensees or agents to check whether a debit card has a credit limit with every purchase.

In addition, the proposals do not specify whether licensees and agents must introduce technical solutions or agreements with payment service providers ensuring that payments will not be made via a credit facility linked to a debit card.

“Spelinspektionen interprets this proposal to mean that license holders and agents may not authorize such a payment if the recipient, without special investigative measures, can discover that the payment is made in the form of credit,” the regulator said. “For the reasons given, the scope of the proposed credit ban on debit cards could be clarified more clearly.”

If Sweden goes ahead with its planned ban, it will join several other major markets in banning credit gambling. The UK introduced a similar ban in April 2020, and the Gambling Commission reported that the transition was smooth and there were no unintended consequences. Australia has also decided to ban credit card gambling under the Interactive Gambling Amendment Act 2023. Norway, Brazil and several other countries have introduced similar measures.