Swedish Gambling Act became operative on 1 January 2019.
From that day any gambling company that has no licence is prohibited.
Types of licences
Gambling and betting operators in Sweden and those who are not Swedish, but want to provide gambling services in the country are obliged to apply for one of these six types of licences:
- Licence for state monopoly — includes land-based casinos, gambling on land-based gambling machines (slots) and certain forms of lotteries.
- Licence for charities/good causes — includes certain forms of lotteries and land-based bingo as well as local pool betting at horse racing tracks.
- Licence for land-based commercial gambling — including certain limited casino games and gambling machines (slots) is provided at an amusement park or at hotel or restaurant premises which hold a permit to serve alcohol. This licence can also include certain land-based card tournaments held outside a casino.
- Licence for gambling on ships in international traffic — including gambling on gambling machines (slots) and certain limited casino games.
- Licence for commercial online gambling — including online casino table games, online bingo, and computer-simulated gaming machines (slots). licences can be granted to any operator, including private gambling operators, who satisfy the formal requirements.
- Licence for betting — including both land-based and online betting. A betting licence also covers betting on horse races, betting on electronically simulated events and the outcome of lotteries (if the consent of the entity providing the lottery has been obtained). Betting on occasions where the majority of participants are under 18 years of age, spread betting or betting on events that are offensive or inappropriate is prohibited.
The maximum period of the validity of the licence is 5 years.
The most critical aspects of the Swedish Gambling regulations
Responsible gaming became a vital part of Swedish Gambling Act.
From now, all gambling and betting providers must ensure responsibility and comply with marketing, risk management, and fraud prevention rules described in the Act.
Here we emphasize the most critical Chapters and Sections that touch online gambling companies and offer Covery solutions that help to comply with them.
Risk and vulnerability management
The holder of the licence must designate a decision maker who is responsible for risk and vulnerability analysis.
According to the Act, Chapter 5, Section 4, there must be documented procedures for monitoring, detection, analysis, management, reporting, and registration of security and information security incidents.
How to comply:
While investigating new Swedish Gambling Act, we came to the conclusion once again, that Covery can efficiently help gambling providers to ensure responsible gaming.
Covery is performance-based platform measuring the probability of risky events by using machine learning models, rule-based scoring and policies, enhanced and automized KYC procedure.
The machine learning algorithm reveals hidden patterns, previously undetected correlations, transactional and interaction anomalies, and easily integrates with your current business flow and risk logic.
Currently, platform analyzes over 5,000,000 user data on a daily basis.
All risk management and fraud prevention processes have documentation available on Covery website https://covery.ai/docs/
Functional requirements within KYC / AML screening
The Swedish Gambling Authority controls licenced gambling operators for their compliance with relevant AML laws. Thus, each of gambling and betting providers should assure that they have made risk assessments of how their products could be used for money laundering, fraudulent activities, terrorism.
Together with risk assessments, applicants need to have KYC procedure, and in particular PEP check.
Politically exposed person (PEP): a person who holds, or has held, a prominent public function in a country or in the management of an international organization. (Chapter 1, Section 2)
According to Chapter 9, Section 3 of the Act, after the check has been performed, it must be registered in the gambling system.
Registration can be performed by adding a PEP box in the player register indicating ‘yes’ or ‘no’.
How to comply:
Covery team takes KYC procedure as a crucial part of the customer due diligence, that protects businesses from money laundering, identity theft, cyberterrorism, scam, and other fraudulent activities.
Covery’s automatized KYC procedure is divided into KYC profile and KYC submit events, that enable the analysis of both simple and complex entities for various industries. It can be easily incorporated to specific risk logic of business.
As of today, Covery integrates with a global provider of third-party risk management and regulatory compliance solutions.
Currently, our global partner offers PEPs, sanctions, and criminals watchlist for the international businesses.
Integration with this service enables Covery clients to automate KYC and AML procedures, and use obtained results inside the risk logic for more precise user scoring.
Players account protection and detection of fraudulent behavior
According to Chapter 9, Section 4, in purpose to prevent account takeovers, the gambling systems must track all logins, detect and register any attempts of unauthorized access to player’s account.
The licence holder must be able to verify that the funds deposited into a player account by bank card or bank account, or other payment services are owned by the same person: owner of a card and owner of the player account. (Chapter 9, Section 8)
How to comply:
Device fingerprinting is a top-notch tool and part of Device Intelligence technologies, that allows businesses to detect cardering, avoid account takeovers, prevent all other types of fraudulent activities, and score risks in real time.
Covery platform collects unlimited data points generated during the user journey, combines it with device fingerprinting data to analyze potential risks and return back a result in the real-time within 200 ms.
Platform gathers an automated analysis for such user actions as Installation, Registration, Confirmation, Login, Transaction, Refund, Payout, Transfer and combines it with data gathered during KYC procedure.
We also can gather different types of data, and as many data points, as your business needs: full name, address, birth date, email etc.
Moreover, Covery measures the probability of risky events by using machine learning models, rule-based scoring and policies.
The machine learning algorithm reveals hidden patterns, previously undetected correlations, transactional and interaction anomalies, and easily integrates with your current business flow and risk logic.
Underage verification
Chapter 9, Section 2: The gambling system must be capable to verify the player’s age.
All gamblers should have 18 years of age (20 years of age in land-based casinos) and can’t use credit cards, because credits in gambling are prohibited.
How to comply:
Covery’s automized KYC procedure could be used to detect underage players.
During the KYC procedure, Covery checks user across PEPs watchlist, and furthermore enables additional usage of obtained results and scores for other user’s actions analysis.
For instance, applying flexible settings, rules, and scenarios in the platform for tracking the age of players, you will be able to exclude those, who are under 18.
Responsible gaming
All licenced gambling providers should protect their customers from redundant gambling and provide “duty of care”. The duty of care should be presented in an action plan to further be implemented.
According to Chapter 9, Section 10: players should be offered an option to self-exclude, to set a budget, to set day, week and month limits, and to limit log-in time.
How to comply:
Here we would like to underline one other point of responsible gaming, but connected to this paragraph. Covery helps to provide players with fast payouts.
Lot’s of iGaming businesses spend huge resources of their risk managers on time-consuming KYC.
Covery transforms manual KYC procedure into an automatic process of complex data collection, analysis, and decision-making all-in-one place.
Thus, Covery ensures responsibility on the side of iGaming provider.
Enhanced reporting functionality
Chapter 8: Licenced gambling and betting providers should have enhanced reporting:
- generate reports for all registered players, their account information;
- generate information about player’s transactions during the login session:
1. player ID;
2. start time of the game;
3. the player’s balance at the start of the game;
4. bet (time-stamped);
5. contribution to the pot;
6. status of the game;
7. outcome of the game (time-stamped);
8. distribution of the pot;
9. end time of the game;
10. winnings;
11. the player’s balance at the end of the game;
12. all interrupted games and the reason why they were not finished.
How to comply:
Covery creates a new complex data and combines it with a knowledge of Trustchain, a dynamic real-time database with email, device, IP, card ID reputation records, that all together helps to make more precise decisions and congregate them into one place.
Currently, platform analyzes over 5,000,000 user data on a daily basis.
Thanks to machine-learning models, Covery analyzes user information in a matter of moment and sends a ready-to-use report decision to gambling provider, thus maintains enhanced reporting.
All APIs are available on Covery website https://covery.ai/docs/
To sum up:
Gambling regulators and governments of countries all around the world streamline their efforts to make gambling responsible. Every year we see crucial changes in documents and laws regarding risk assessment and fraud prevention in iGaming.
Covery takes seriously ensurance of responsible gaming, thus we create new and new features for the special needs and demands of global gambling providers.