Videoslots Hit With Swedish Injunction Over Deposit Loophole
Online gambling operator Videoslots has been hit with an injunction by the Swedish regulator. The company allowed customers to exploit a loophole that enabled them to bypass the weekly casino deposit limit.
The Swedish Gambling Authority (SGA), has placed an injunction on online casino operator Videoslots after the regulator found that the company allowed customers to deposit more than the regulations allow at the operator.
Under rules, introduced due to the Co-vid 19 pandemic, customers are only permitted to deposit SEK5,000 (£440) per week on online casino games. However, SGA investigators discovered that customers could utilise a loophole in Videoslots platform and cancel previous withdrawal requests.
The regulator found that the withdrawals button took up to seven days to become active, and customers could cancel withdrawal requests for up to 60 days after being requested. By cancelling a previous request, the funds would then be available for the customer to use, even if they had already deposited the maximum amount of SEK5,000 in that week.
The ability to reverse withdrawal requests was introduced in February last year; the company citing customer demand for its introduction and defended the decision saying it allowed customers to control their budgets better.
In response to the investigation by the SGA, the company claimed the undo withdrawals function did not fall under the scope of the deposit regulations and dismissed the grounds for the regulatory investigation.
Videoslots also maintained that the country’s temporary restrictions on deposit limits were illegal under EU law which allows the free movement of goods and services between member states as one of its founding principles. The company have stated they have started their own legal proceedings against the Swedish regulator over the matter.
SGA said on the matter: “The regulations state that the upper limit for deposits at commercial online gaming amounts to a maximum of SEK5,000 per week and that the licensee is obliged to ensure that the limit cannot be exceeded.”
Along with the injunction against Videoslots, the SGA has also threatened the operator with a fine of SEK250,000 every week that the current loophole remains open. With the regulator allowing three-weeks after discussions before it comes into effect.
A Videoslots spokesperson said: “Videoslots notes the decision made by the Swedish regulator and is pleased that it confirms compliant implementation of the bonus, deposit and time limits put in place by the Swedish government to counter a perceived increase of risks during the Covid-19 pandemic.
“According to the decision, these regulations also prohibit the withdrawal-related functionality which remained in question. We will comply and remove this functionality, having already offered to do so during the assessment,” The online operator also complained about the ambiguity of the deposit limit regulations.
“We do not, however, believe that we were in breach of the Covid-19, or any other regulations, and call for greater clarity to aid responsible operators like ourselves. Furthermore, we maintain our position that these regulations are both unreasonable and unjustifiable,”
“Not only are they contradicted by facts and damaging to licensed operators, they are also completely counterproductive to their declared aim of player protection and push players into the arms of illegal operators. We will therefore continue to challenge these regulations,” Videoslots added.
Videoslots disagreement with the SGA is not the first time the company has clashed with the regulator or campaign groups. In December last year, the Swedish Consumer Agency named Videoslots and 12 other operators, highlighting unfair terms and conditions consumers must agree to when signing up.