The Swedish Patent and Market Court of Appeal has ordered Betsson, a leading betting company, to repay SEK 5.8 million (approximately €520,000) to a customer diagnosed with gambling addiction. The ruling sets a significant precedent, resonating with similar cases across Europe and raising concerns for Betsson about potential repercussions.
Unregulated market practices under legal scrutiny
The court’s directive implies that Betsson may face a barrage of lawsuits from individuals affected by gambling disorders, utilizing this verdict as a basis for legal action. Legal expert Magnus Rydeving suggests that the financial implications for Betsson could extend into the hundreds of millions of krona, indicating a potential financial setback for the company.
The court highlighted Betsson’s responsibility, asserting that the company must reimburse all historical spending by the affected individual, along with additional compensation for mental distress. The plaintiff alleges that Betsson employed aggressive marketing strategies, including frequent bonuses, despite being aware of his gambling problem. It is interesting to see that these actions occurred prior to the formal regulation of the Swedish gambling market in 2019, providing a legal loophole for the affected individual.
Legal precedent poses threat to operators
Magnus Rydeving points out that this ruling aligns with legal precedents in Germany, Austria, and the Netherlands, where substantial sums have been recovered from gambling companies. The argument centers on companies acting against the law being ineligible for profits from such activities. This development shows that legal scruitiny of gambling companies operating in unregulated markets is increasing and regulators are being more vigilent.
However, in the case of Betsson, the company may find some relief in the fact that the ruling pertains specifically to the pre-regulation period of 2014 to 2019.
Any customers seeking legal action against Betsson after 2019 may encounter greater legal hurdles.
Impact of the decision
The decision further highlights the evolving dynamics between gambling operators and EU regulators, indicating potential challenges for licensed stakeholders in certain jurisdictions. This legal directive indicates that Betsson might face a series of legal challenges from individuals affected by gambling disorders, posing a significant financial threat. The ruling underscores the growing legal scrutiny faced by gambling companies operating in unregulated markets, potentially reshaping industry practices and accountability standards.
Betsson retains the option to appeal to the Swedish Supreme Court, but the company’s intentions remain undisclosed. The outcome of this case could reshape industry practices and raise the bar for accountability within the gambling sector, potentially influencing the landscape of unregulated markets and licensed operations in the European Union.
Background of recent case
Betsson was confronted with the lawsuit from a player who alleged manipulation by the operator. The player claimed that Betsson lured him into excessive gambling with trips, bonuses, and incentives despite his evident signs of problem gambling between 2016 and 2018. Seeking almost SEK5m (€443,113) in damages, the lawsuit questioned Betsson’s adherence to the Swedish Contracts Act and its responsibility for problem gambling. Betsson argued that the player’s losses were self-inflicted, citing his financial capacity. CEO Pontus Lindwall testified in court. The case has been closely monitored by the industry and will without doubt set a crucial precedent for the gambling sector. It also parallels a recent similar lawsuit against Unibet owner Kindred Group.
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