Kindred hit with SEK100m penalty fee for Swedish bonus violations

Kindred Group has been warned by the Swedish Gaming Authority (Spelinspektionen) and issued the operator with an SEK100m (£8.4m/€9.2m/$10.1m) penalty fee for offering unauthorised bonuses and lotteries without a licence to players.

The regulator explained that checks on the operator’s Unibet, Maria Casino, Storspelare, Bingo and iGame sites revealed a number of unauthorised bonuses.

While Swedish regulations state that players can only be offered a bonus upon sign-up, Kindred had offered promotions around customer acquisition, poker, casino tournaments and cash draws, as well as a loyalty programme for online bingo in March 2019.

When questioned on this by Spelinspektionen, Kindred said these did not constitute bonuses as they did not contain financial incentives and were instead more of an in-game mechanic.

A second round of checks in May and June that year uncovered offers such as free spins, free online bingo games, free bets, and rewards for playing poker. Kindred then removed these offers, and noted that the free spins promotion was out of date, and could not be activated by customers.

It then had to answer further questions on the bingo promotions and loyalty programme, submitted by Spelinspektionen in September 2019.

Not only did the regulator consider the bonus violations to be serious, but it also noted that the prize draws it offered were not covered by its betting and gaming licences in the country.

“However, since [Kindred] has amended its offer, and it is assumed that in future the company will not violate the rules on bonus offers or offering games that are not covered by its licence, Spelinspektionen considers that a warning alongside a penalty fee is a sufficient intervention,” it said.

It said the SEK100m penalty had been determined based on regulations stating that the penalty fee should not exceed 10% of a licensee’s turnover. Considering the number of violations, and the fact these relate to both bonuses and unauthorised lotteries, coupled with Kindred’s high turnover, Spelinspektionen said this had resulted in a high penalty fee.

Kindred, meanwhile, said it had initially interpreted what constitutes a bonus differently to the regulator, and from spring 2019 had adopted a more restrictive approach to promotions.

However, it said it would appeal Spelinspektionen’s decision to obtain judicial guidance on how the legislation should be interpreted. In the meantime, it pledged to continue following strict guidelines based on the regulator’s warnings and penalty fees.
 
“Kindred is of the opinion that the Swedish Gambling Act adopted on 1 January 2019 has been vague in areas related to commercial activities and thereby creating unnecessary ambiguity,” the operator explained. “Kindred welcomes more clarity in these areas and continues to improve its operations to ensure full compliance.”

It noted that its consumer protection processes had been audited by igaming testing agency eCogra, with no issues flagged.