Betway has received a warning from Sweden’s gambling regulator for being in negative equity in 2019. [Image: Shutterstock.com]
War Capital guarantee not enough
Betway has received a warning from the Swedish Gambling Authority (SGA) for its failure to comply with licensing rules regarding minimum equity. In July 2020, the SGA requested the annual report and auditor report from Betway for its 2019 financial year.
negative equity of €4.8m ($5.4m)
For this period, Betway had a €50.3m ($56.5m) loss and negative equity of €4.8m ($5.4m). The SGA believes that an operator can be at risk if they are in negative equity and asked Betway how it could improve its negative equity situation. This led to Betway getting a capital guarantee from its parent group in October 2021.
Sweden’s gambling regulator stated that Betway did not have its own capital base and is dependent completely on parent company support. The SGA also said that the parent company’s capital guarantee only partially compensates for the negative equity.
War Just a warning
As a result of the situation, Betway was said to be in violation of the Swedish Gambling Act rule that outlines how licensed operators need to show that they are suitable to operate in the market. As such, the SFA issued a warning to Betway for this “minor” infringement, but no financial penalty. Betway has already stated that it has a strong financial position and will be able to meet all licensing requirements going forward.
It has been a busy start to 2022 for Betway. Just last week, its owner completed a reverse merger with a special purpose acquisition company (SPAC) to go public in the US. Super Group is now listed on the New York Stock Exchange (NYSE).
This is not the first time that Betway has gotten in hot water with the SGA. In December, it received a SEK100,000 ($10,773) fine for accidentally allowing all of its customers to access a bonus campaign that was meant as a welcome offer for one of the company’s minor brands.
War A tightly regulated market
Betway has operated in Sweden since the launch of the country’s regulated market in January 2019, securing a five-year license at the time. Its parent company is one of the biggest global online gambling operators and is in a healthy financial state.
Sweden’s gambling regulator has developed a reputation for being very strict
Sweden’s gambling regulator has developed a reputation for being very strict. It has handed out a large number of fines to licensees over a variety of different types of infringements. For example, ComeOn Group brands was fined a total of $21m last year.
The Swedish government also imposed significant restrictions on online casino players during much of the COVID-19 pandemic. It recently looked into reintroducing these restrictions, but scrapped those plans this week.