The Swedish Gambling Authority (SGA) has reprimanded Betway Limited for failing to meet its licence obligations.
Operator Betway has responded to the statement, however, saying the regulator is "factually incorrect." Its full response can be seen at the bottom of this story.
On 1 January 2019, Betway was granted a five-year licence on the basis of its strong financial performance, but according to the SGA, the company’s equity was negative for the majority of the most recent fiscal year.
The regulator said negative equity puts a gaming company’s operations at risk, but the operator claims it has access to sufficient capital to continue conducting business.
In Sweden, negative equity can be grounds for compulsory liquidation, but Betway is based in Malta, and thus under no such obligation.
While the SGA acknowledged this, it cited a 2019 decision by the Administrative Court in Linköping.
This stated: “The fact that a company has negative equity may still give reason to doubt its ability to maintain a sound financial position, even if it does not mean that any concrete measures need to be taken in accordance with the rules where the company has its registered office.”
However, Betway Limited is part of the Betway Group, and in response to the SGA’s complaint, provided a capital guarantee, saying the group will makes its resources available if the need arises.
However, the regulator did not recognise this as adequate compensation for the licensee’s negative equity, and thus chose to reprimand Betway.
It concluded: “A capital guarantee can only partially compensate for a negative equity with the licensee, which is why Betway Limited is issued a remark.”
Betway responded by telling Gambling Insider: “Betway is wholly owned by Super Group which has recently listed on the New York Stock Exchange with the ticker ‘SGHC’. Super Group is a financially sound, profitable business, attested to by its publicly accessible financial reports and results – which can be found on www.sghc.com.
"Aside from the fact that the comments by the Swedish Regulator relate to 2019, any statements suggesting that Betway's current financial situation constitutes any risk to the company's continued operations, is factually incorrect.
“It is our understanding that the SGA based its ruling on the 2019 accounts for Betway Limited. While Betway Group had negative equity in 2019 but had a positive recovery in 2020 and 2021 both years showing positive equity and strong results, and now part of Super Group a highly profitable business listed on the NYSE.
“We are therefore confident that we can meet the requirements of any licence application and satisfy the SGA going forward.”
Source ; /www.gamblinginsider.com