Swedish gambling regulator Spelinspektionen has written to online payment processors to remind them that they may be committing a crime under the country’s gambling legislation by serving unlicensed online gaming operators.

The new Gambling Act, which came into force on January 1st of this year, licensed and regulated online gaming for the first time in Sweden while criminalising unlicensed operations.

The letter to the country’s regulated payment processors warns that facilitating payments to and from unlicensed operators puts Swedish consumers at risk by allowing them to play on sites that do not adhere to the country’s consumer protection rules, which include the Spelpaus system to opt out of all regulated gambling.

The regulator notes that unlicensed gaming companies do not have access to Spelpaus, which means they do not have information about whether a player is opted out. By facilitating financial transactions with unlicensed operators, payment service providers risk committing the offence of promoting unlicensed gambling while also jeopardising the wellbeing of consumers.

The regulator adds that such actions also diminish efforts to combat money laundering and create unfair competition for the country’s licensed operators.

“In a licensing system, it is important to protect license holders from unauthorized competition from unlicensed gaming companies,” Spelinspektionen states in the letter. “Payment service providers that mediate bets or profits to and from unlicensed gaming companies contribute to unfair competition for gaming companies licensed under the Gambling Act.

“Unregulated gambling also has serious consequences for society, for example in form of lost tax revenue and increased vulnerability for problem gamblers,” the regulator adds.

“All real-money games provided in or directed at Sweden, including games over the Internet, must have a Swedish gaming license. Payment service providers that mediate bets or winnings to and from gaming companies that do not have a license may be guilty of violating the Gambling Act.”