Additional Swedish judgment in a dispute between a gambler and two gambling operators

Background

The Swedish resident gambler P.H. sued two Maltese-based gambling operators within the same company group for repayment of losses and damages for pure economic loss and for personal injury. The first gambling operator, Kindred Group PLC, was sued for repayment and damages in the amount of SEK 10,242,409 plus interest concerning gambling during the years from 2011 to 2018 (Claim A). The gambling services were not provided under a Swedish license, since such was not available at that time. The second gambling operator, Spooniker Ltd, was sued together with Kindred Group PLC for joint and several liability for repayment of losses in the amount of SEK 10,000 plus interest concerning gambling during the year of 2019 (Claim B). These gambling services were provided under a Swedish license. Both claims were dismissed by the Stockholm District Court.

The first claim

In relation to the first claim, Claim A, the court found that P.H. and the gambling operator had not entered into any agreement for the provision of gambling services. Instead, P.H.’s gambling had been carried out through an agreement with that gambling operator’s subsidiary. The court further found that it had not been demonstrated that the gambling operator had violated the prohibition of promoting illegal gambling services under the former Swedish Lottery Act (1994:1000). Moreover, the court established that P.H. had not proved that the gambling operator had gained any unauthorised profit through P.H.’s gambling under the agreement with the subsidiary. The claim for repayment of losses as well as the claim for damages were for these reasons dismissed.

The second claim

The second claim, Claim B, is perhaps the most interesting part of the judgment, as the basis for the claim relates to the new Swedish Gambling Act which entered into force on 1 January 2019.

The claimant’s argumentation

In relation to Claim B, P.H. stated that Kindred Group PLC and Spooniker Ltd were jointly and severally liable for repayment of the unauthorised profits that he claimed had arisen as a result of the companies jointly breaching their duty of care under Chapter 14, Section 1 of the Gambling Act. P.H. argued that he had not received any help at all from the defendants to reduce or solve his gambling addiction. P.H. further argued that with regard to the fact that he had gambled for approximately SEK 55 million with the defendants and suspended himself from gambling on several occasions, the defendants had been well aware of P.H.’s situation as a gambling addict. Instead of fulfilling their duty of care, P.H. claimed that the defendants had diligently tried to get P.H. to gamble more and for larger stakes by making contact, offering bonuses etc., which he asserted had been going on for many years and in violation of the one-time-bonus offer permitted under the Gambling Act.

The defendants’ argumentation

The gambling operators countered by stating, apart from that there had been no contractual relationship between the first gambling operator and the gambler, that neither of the companies had breached the duty of care obligation, that the companies fulfilled all legal requirements for their operations, and that no illegal gambling services had been provided. The gambling operators further stated that it was unclear when and how the alleged contacts between the parties would have occurred, and that P.H. had not claimed or demonstrated any evidence that bonuses had been offered or provided to him in 2019. In that year, P.H. made deposits of SEK 10,000, which is not such a high amount that the gambling operator had reason to take any special measures against P.H. in addition to the general gambling responsibility measures that follow from the Gaming Act. Further, neither Kindred Group PLC or Spooniker Ltd had made any profit corresponding to P.H.’s loss.

The District Court’s assessment

In its judgment, the Stockholm District Court began with concluding that P.H. and Spooniker Ltd had been in an agreement for the provision of gambling services during the year of 2019, but that P.H. and Kindred Group PLC had not had such an agreement. The court then continued by reiterating the relevant provision of the Gambling Act; the duty of care includes an obligation to prevent excessive gambling through continuous monitoring of gambling behaviour, and licensees must report how the duty of care is to be fulfilled in an action plan. The Gambling Act contains a number of provisions that clarify what the duty of care entails, including a ban on bonuses except at the first gambling occasion, rules on stakes, etc. The purpose of the duty of care is to protect players who have a limited ability to play responsibly.

In its assessment of the matter, the court first concluded that P.H. in the years prior to 2019 had presented all signs of a rather limitless gambling in terms of the amounts he lost, but that the amount for 2019 in itself was not so large that it should automatically have triggered some special warning signals for the gambling operator.

As regards P.H.’s statements concerning contacts and bonus offers from the gambling operators, the District Court noted that the ban on bonus offers in the Gambling Act did not exist during the earlier years that P.H. gambled. As far as had been evidenced in the case, Maltese law (under which license the gambling operators operated) did not prohibit the relevant type of bonuses and prior to 2019, Spooniker Ltd had not been a contracting party. Moreover, the court stated that it seemed likely that it was not staff from Kindred Group PLC, but from the subsidiary with which the agreement for gambling services was concluded prior to 2019, that had contacted him during that time, i.e. prior to 2019. P.H. had also not specified and even less shown when he would have been offered a bonus or contacted in connection with the gambling in 2019.

Overall, the District Court thus considered that it had not been shown that either of the gambling operators had violated the duty of care under the Gambling Act, and the companies had therefore not made any unauthorised profit.

Reflections

The first claim, Claim A, is perhaps of less interest as the claimant failed to sue its contractual party, but another company within the same company group. However, the second claim, Claim B, certainly deserves some consideration.

The duty of care under the Swedish Gambling Act is essentially a regulatory requirement for obtaining and keeping a Swedish gambling license. That is, the consequence of violating a provision in the Gambling Act, including the duty of care, is an intervention from the Swedish Gambling Authority. Such an intervention could be a prohibition, perhaps in combination with a penalty fine, a warning or a withdrawn license.

However, it should be noted that the Stockholm District Court in the present case might have been implying that there could be a possibility for gamblers to recover losses in cases where the gambling operator has not fulfilled its duty of care towards the gambler. This might be hinted in the court’s statement that the gambling operators in this case had not made any unauthorised profit because they had not violated their duty of care. It is, however, also certainly possible that the court chose this line of argumentation to avoid having to actually deal with the question, since the claimant’s argumentation lacked any compelling evidence regarding the duty of care.

In any case, the court’s argumentation is rather unsatisfactory as it does not really deal with the question of whether a violation of the duty of care could indeed lead to other consequences than those prescribed in the Gambling Act. Thus, an assessment of this question by the Court of Appeal would be interesting.