Swedish gambling regulator, Spelinspektionen, penalised five non-profit organisations this week for violating gambling marketing regulations. The five charities, including political and cancer advocacy groups, were reportedly using aggressive and misleading marketing tactics to promote lottery sales.
Key Notes from the Story
- The five charities are the Swedish Breast Cancer Association, Swedish Prostate Cancer Association, Swedish Social Democratic Party, Swedish Social Democratic Youth Federation, and Swedish Social Democratic Women’s Federation.
- The regulator’s stern action follows the Swedish Consumer Agency’s investigations into aggressive lottery marketing practices over the telephone.
- All five charities blamed third-party telemarketing companies that they had hired to provide sales and support.
Prominent Political Parties Under Fire
The regulator issued a penalty of SEK3 million (€275,799) and a stern warning to the Swedish Social Democratic Labour Party, the Swedish Social Democratic Youth League and the Swedish Social Democratic Women’s Association.
The penalty is the result of an investigation by the Swedish news publication Dagens Nyheter into state-sponsored lottery provider Kombilotteriet (Combi Lottery). Following the report, the Swedish Consumer Agency conducted an independent investigation into the political groups. They found that all three organisations had used aggressive marketing strategies to promote lottery sales via telemarketing channels.
The agency concluded that the marketing practices violated Swedish laws. Following the media coverage and the agency’s reports, the Swedish Gambling Authority initiated legal proceedings against the perpetrators.
Combi Lottery is run by Kombispel, a subsidiary of the A-lotteries company, which is owned jointly by the Swedish Student Union and the Social Democrats. The licensees’ official statement to the Spelinspektionen explained they had hired Kombispel to run the lottery on their behalf. Kombispel, in turn, outsourced marketing, sales, and support to an external telemarketing firm.
Spelinspektionen penalised the licensees for failing to moderate the operations of third-party contractors and compromising player safety. The regulator’s official statement read:
The licensees are fully responsible for their gaming operations, including the services of contractual employees and third-party agencies operating at their behest. The Swedish Consumer Agency reports that the licensees used aggressive marketing practices in violation of the Marketing Act. Despite the licensees taking up corrective measures, the facts remain unchanged.
Swedish Charities Also Under Fire
The Spelinspektionen also penalised the Swedish Breast Cancer Association and the Prostate Cancer Association for lacking control over their marketing actions. The regulator’s investigations were based on the reports of a consumer agency that evaluated the marketing methods of several non-profits promoting the Date Lottery (Datumlotteriet).
The agency’s investigation revealed that several people received invoices from the lottery organisation for tickets they had not purchased or inquired about. There were other instances of people getting signed up for donation subscriptions without consent.
Both non-profits, in their respective letters to the gambling authority, stated that they hired external companies to create and sell lottery tickets using their licences. Those companies, in turn, hired telemarketing agencies for marketing and sales.
The Swedish Gambling Authority released a statement saying that it does not believe that the licensees had enough control to ensure the lottery was run in a managed and safe manner. All five non-profits are licensed to offer lottery games, proceeds from which must be used for charitable causes.
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