To answer the legal question, no these races are in no way legal.
This video is from Birka Cup which is held 5-6times/year during the summernights in Stockholm.
There is a once a year event called Stockholm Open, but that race isn't legal either so I think that you might have misunderstood that if you've heard about it.
Also, I have some pics of the Challenger in the video with a overly refreshed girl posing in front of it, but I don't think that I can post it here? (no shirt on
)