Yggdrasil Fined in Sweden for Providing Software to Unlicensed Operator

The Swedish Gaming Authority (SGA) has levied a SEK300,000 ($28,350) fine against Yggdrasil for supplying software to an online gambling operator that lacked a Swedish license, marking the first such penalty under the new B2B licensing requirements. This case serves as a warning to the broader industry, signaling that the SGA will not tolerate licensed entities collaborating with the unregulated sector.

The SGA Highlighted the Severity of Yggdrasil’s Offense

The introduction of B2B licensing requirements on 1 July 2023 mandated that companies with a gaming software license refrain from providing software to parties lacking the necessary Swedish license. This measure aims to bolster channelization to the regulated market and curb illegal gambling activities. This newest fine indicates the SGA is willing to enforce its regulations even against high-profile companies.

The SGA’s investigation, conducted in January 2024, closely examined the websites of several operators prohibited from offering games in Sweden. It found that Yggdrasil had provided software to an operator without a local license. The SGA had banned the operator since October 2021, raising questions regarding Yggdrasil’s involvement with a known black-market entity.

Upon learning of the violation, Yggdrasil swiftly took corrective action on 23 January, ceasing to supply gaming software to unlicensed operators. The supplier attributed the illegal provision to a contractual breach by a partnering retailer. While acknowledging Yggdrasil’s prompt response and cooperation, the SGA deemed the violations significant enough to warrant a financial penalty and an official warning.

Sweden Remains Beset by Black-Market Operators

According to the SGA, frequent violations of that caliber could result in a license suspension for the offending supplier. Fortunately for Yggdrasil, the company’s clean track record and cooperation with the authorities limited the scope of the corrective action. As per Swedish regulations, the SEK300,000 fine was calculated according to Yggdrasil’s turnover from the past financial year.

While the SGA taking action against offending operators is frequent, going after a supplier sets a new precedent and could result in more investigations of a similar nature. Such measures should hopefully help the country’s ongoing battle against black-market operators, giving them fewer options to source content while channeling more users to the regulated sector.

The warning against Yggdrasil corresponds with rising concern regarding an increasing number of payment providers catering to the needs of unregulated operators. While the SGA can block payments to offending parties, black-market entities have become adept at bypassing restrictions. Unfortunately, Sweden’s fight against the unregulated sector still appears locked in a stalemate.