The Swedish Gambling Authority (SGA) has handed out a combined SEK4m (£310,000) in fines to various charities and political organisations over their marketing of lottery products.
The Swedish Breast Cancer Association and Prostate Cancer Association have been ordered to pay a combined penalty fee of SEK1m.
Meanwhile, the Swedish Social Democratic Workers’ Party, Social Democratic Youth League and the Social Democratic Women’s League have collectively been fined SEK3m.
Each organisation has also been handed a warning by the regulator regarding future conduct.
The investigation into the cancer charities was led by the Swedish Consumer Agency following complaints against their combined lottery product Datumlotteriet.
Proceeds from the Datumlotteriet tickets sold go towards the funding of both charities.
The Swedish Consumer Agency’s investigation found customers were receiving invoices from Datumlotteriet despite never purchasing tickets or contacting the lottery brand in any way.
Several customers were also charged for a subscription service without their knowledge after being contacted by Datumlotteriet and offered tickets.
After reaching out to both parties for further information, the SGA was informed they had hired an external contractor to operate and sell Datumlotteriet products.
The contractor in question proceeded to hire an external telemarketing firm to handle the sales and marketing of the lottery tickets.
In statements submitted to the SGA, both charities claimed they had taken several measures to ensure business had been conducted to the highest standards of consumer protection.
However, the SGA found that by handing the operations of the lottery product off to a third party, both charities lacked the necessary amount of control over proceedings expected from a licensee and were therefore in breach of Swedish gambling regulations.
An SGA statement read: “The SGA believes that the licensees did not have the control required to ensure that the business is run by the contractor under controlled and safe conditions.
“The conditions for the licensees to have been allowed to assign someone else to perform work in the licensees’ gaming operations were lacking.
“As the Swedish Gambling Authority has previously stated, it is the licensees who have full responsibility for the gaming operations, including the operations that have been entrusted to contractors.”
The regulator added that although both parties cooperated with the investigation, it could not be “considered to have been active in a way other than what one would normally expect”.
As a result, that assessment, coupled with the SGA being unable to determine how long the violations had been occuring for, led to the charities being issued a fine that the regulator deemed warranted with the severity of the breech.
Regarding the political groups, the Swedish Consumer Agency’s investigation found the use of “aggressive business methods in connection with telephone sales of lottery tickets”, which were aimed at elderly customers and in violation of marketing regulations.
The SGA stated the telephone marketing was “pushy”, leading to elderly consumers to take offers without thinking. The regulator stated the licensees had “deliberately exploited the circumstances in order to get consumers to buy […] products”.
Similar to the charity investigation, the firm hired the external telemarketing company, Kombispel, to manage the sale and marketing of lottery tickets.
The political groups informed the SGA that they had, together with Kombispiel, developed routines for how they could oversee lottery operations with more control to ensure such errors did not occur again.
These processes had only been strengthened during the SGA’s investigation, and all parties “immediately took corrective action and initiated extensive and effective measures after deficiencies were pointed out”.
The SGA added: “The Swedish Consumer Agency’s letters regarding aggressive marketing in telephone sales of lottery tickets show that Kombispel’s salespeople have used aggressive means of pressure, that consumers have received invoices without prior orders, and that repeated and unwanted contacts have been made despite consumers having declined the marketing.
“The SGA believes that the licensees have not had the control required to ensure that the operations are run by the contractor under controlled and safe conditions, and thus the basic conditions for the licensees to have been allowed to commission someone else to perform work in the licensees’ gaming operations have been lacking.”
As with the charities, the SGA found the political groups’ cooperation to be insufficient, and that it could not determine how long the violations had been ongoing.
Earlier this month, the SGA handed a SEK10m fine to FDJ United-owned Spooniker over anti-money laundering (AML) failings.
The post Swedish regulator sanctions charities and political groups over lottery marketing violations first appeared on EGR Intel.
Swedish Gambling Authority hands out a combined SEK4m in fines to the country’s Breast Cancer Association, Prostate Cancer Association and various branches of the Social Democratic Party
The post Swedish regulator sanctions charities and political groups over lottery marketing violations first appeared on EGR Intel.