Zimpler, a fintech company providing tailored solutions for safe and instant account-to-account (A2A) payment solutions, was instructed on July 6 to cease the provision of payment services containing BankID to igaming companies that accept Swedish consumers without a Swedish gambling license. The order was issued by the Swedish Gambling Authority (Sw. Spelinspektionen) and should be carried out by July 31 at the latest. Zimpler will follow the order, as the company already in May announced that it has chosen to end the business relationships that are affected by the decision. However, the company has opted to appeal the decision, as it affects Zimpler and raises legal issues that are crucial to clarify, not only for Zimpler but for the entire industry.

In the de-regulation of the Swedish gambling market in 2019, consumers were not prohibited from playing outside the Swedish licensing system. Gambling companies without a Swedish license were also not prohibited from accepting Swedish players. Payment service providers were allowed to mediate payments to such companies if these were not targeting the Swedish market. In 2021, the government’s official report proposed some changes to the gambling regulations, for example that gambling companies without a Swedish license would introduce IP address blocking against Sweden based consumers. Zimpler supported the proposal, but the government has so far not implemented it.

“Zimpler supports the Swedish Gambling Authority’s mission to strengthen the Swedish licensing system and consumer protection in the igaming market. We want to promote responsibility and compliance in the gaming industry, and have for a long time invested in product development in this area. In dialogues with legislators and authorities, Zimpler has also proposed measures to strengthen consumer protection, for example that Sweden-based consumers should be barred from games licensed outside of Sweden through IP address blocking, and that B2B licenses should be introduced for payment service providers,” says Johan Strand, CEO of Zimpler.

In line with this, Zimpler announced already in May this year that the company will, on its own initiative, end business relations with igaming companies that do not hold a Swedish Gambling license. The process began in the second quarter and was intended to be completed no later than the third – thus current – quarter of the year. The company is therefore already actively working to end the business relationships covered by the Swedish Gambling Authority’s decision, which it also has been aware of.

Zimpler's decision to terminate the agreements with the affected igaming companies is part of the company’s strategy to contribute to a sustainable payment market through financial services with increased consumer protection, as well as to continue diversifying the company’s business and growing within the other segments where the company currently has the majority of its customers.

However, Zimpler will appeal the decision. The company believes that the decision is misdirected and incorrect with far-reaching consequences. The decision affects the company negatively because its commercial ability to act is limited in a way that is not supported by law.

The decision also contains several legal issues that need to be clarified by the court in order for certain payment service providers to be able to conduct their business without risking interventions from Swedish authorities. These questions include:

• Can the promotion of a gambling offer which is not in itself illegal really constitute illegal promotion?
• Under what conditions should a foreign gambling operator with a license in a country other than Sweden be considered covered by the Swedish Gambling Act, and what significance does the use of BankID somewhere in the payment chain have for this assessment?
• How does the Swedish gambling legislation relate to the free movement of services, such as payments, which are fundamental within the EU?

“The appeal is also a measure to ensure legal certainty in companies' relations with the authorities. Companies must be able to plan and conduct their operations with predictable application of laws and regulations. It is a fundamental principle – both in Sweden and within the EU,” says Johan Strand.