Land-based subsidiary Svenska Spel Casino Cosmopol has received a new gambling license from the Swedish Gambling Authority (SGA).
The new license is valid for five years after the business was effectively shut down as of March 2020 due to the Covid-19 pandemic.
The SGA did not review the Casino Cosmopol business during the licensing process due to the pandemic, despite previously identified AML policy and risk management issues.
“The SGA has assessed that Casino Cosmopol has taken action in accordance with the action plan that was drawn up prior to the new license review,” said agency EGR SGA representative.
“Due to the pandemic, casinos have been closed since March 2020 and remain closed. Consequently, supervisory activities were not relevant,” the GZO added.
Svenska Spel was fined SEK 8 million (£672,000) in November 2018 after regulators found that Casino Cosmopol failed to adequately assess the risks of its clients, treating each client as a low-risk player, regardless of their risk profile.
The SGA also found that the operator lacked customer monitoring procedures and was unable to prevent at-risk customers from accessing its gaming services despite being required to do so.
At that time, the Swedish market was still unregulated and was only fully regulated in January 2019.
Casino Cosmopol successfully argued that the regulator acted disproportionately due to a "lack of clear regulation or guidance" in the area, a claim that was upheld by the Swedish courts and resulted in the operator's fine being reduced to 3 million SEK.
The closure of Casino Cosmopol's business during the lockdown proved disastrous for its long-term performance after revenue fell by SEK 250 million in the fourth quarter of 2020. The company permanently closed the casino in Sundsvall in August and has since cut more than 200 jobs in its retail operating unit.
When discussing the license renewal, BOS CEO Gustav Hoffstedt questioned whether the Swedish government should continue to operate land-based casinos in accordance with the Swedish Gambling Act.
“This is a well-known collection point for money laundering and only operators with the highest standards have proven their ability to achieve the level of AML measures required when dealing with cash,” Hoffstedt explained.
“The government turned out to be not one of those operators. Right now Casino Cosmopol is bleeding. Sports bettors and lottery ticket buyers in rural Sweden are in practice subsidizing land-based casinos in Sweden's three largest cities, as these entities are all owned by Svenska Spel.
“If they were separated, things would be even worse. In this case, the Swedish taxpayers will have to step in and directly subsidize the casino through a substantial shareholder contribution in order to avoid bankruptcy.
"I think it's appropriate to ask if subsidizing casinos should be part of the government's primary responsibility," Hoffstedt added.
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