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Swedish gambling industry thrives on the revised regulation

Swedish gambling industry thrives on the revised regulation

 

Sweden has one of the highest percentages of the gambling population in the world.  According to World Casino Index, in any given year, at least 85 percentof Swedes participate in some form of gambling. The Swedish gambling market has also been showing a continued growth: the figures for the first quarter 2019  released this April by the Swedish Tax authority, indicated a 3% year-on-year jump in total gambling revenues: from   SEK5.8bn (US $ 589 mln) in Q1 2018   to SEK6.0bn (US$ 600 mln) in Q2 2019.  What is affecting such a fast growth rate?

 

It is noteworthy that the 2019 figure of US$ 600mln reflects total revenues of the regulated market only, whereas the US$ 580mln includes revenues derived from both licensed and unlicensed offerings in Q1 2018.  The figures suggest that the recent regulatory reforms liberate Swedish online gambling market encourage its further growth.

 

Recent changes in Sweden’s regulatory scene

 

For many years, Swedish gambling market was largely monopolized by the state-owned companies (Svenska Spel) or state-controlled companies (ATG), which were allowed to provide gambling services for money. Public service organizations such as Folkspel,  Postkodlotteriet and Mljonlotteriet, etc. were allowed to arrange lotteries and bingo activities.

 

With a rapid growth of the internet, a large portion of the Swedish players switched to online gambling via operators who were based outside of Sweden, and the Swedish state-owned monopoly over the country’s gambling industry started receding. Therefore, new legislation was required to set the standards for licensing, monitoring and auditing of gaming companies and enforce their compliance with the laws.

 

In 2018, after prolonged deliberations, the Swedish government finally adopted the bill on-regulating online gambling market, which also enacted a new system for licensing private, commercial gaming companies.  The bill came into effect on January 01. 2019.

 

The new legislation touched upon the following points:

 

  • The gaming licenses were categorized into six different types:
  1. state-owned gaming: casino games, slot games and some lottery only for state-owned companies;
  2. public purpose (lotteries): some types of lotteries only for non-profit organizations;
  3. commercial online gambling for private online operators;
  4. betting for offline and online betting operators;
  5. commercial land-based gaming: – Slot games and card games outside a casino;
  6. cruise ship games: casino games and slot machines.

 

  • Depending on a type of license, the prices will vary from 400 000 – 700 000 SEK (US$ 40 000 -70 000).
  • Commercial (non-state-owned) gaming companies are taxed at 18% on GGRfrom commercial gaming operations.
  • 0% tax rate is applied for non-profit gambling activities (lotteries).
  • Age limit is set at 18 for online gambling and 21 to be admitted to a land-based casino.
  • A provision against the manipulation of sports events called match-fixing was also introduced.

 

The main purpose of introducing these changes in legislation was to increase government revenue and create a safer, regulated online gambling market. The new legislation also focuses more on enhancing customer protection, gaming security and setting clear standards for market regulation.

 

Adapting to new regulations

 

By opening up a regulated gambling market to private gaming companies, Sweden hopes to foster the industry growth and at the same time weed out fraud, crime, and corruption.

 

Implementing these new regulations has made the Swedish gambling market more attractive to international gambling operators. By 2019, Sweden’s gambling regulator has received over 60 applications from online casinos and sportsbook companies looking to operate in the newly regulated gambling market of Sweden.

 

Sweden’s leading gambling trade associations Spelbranschens Riksförbund (SPER) and Branschföreningen för Onlinespel (BOS) have issued a new code of conduct to deal with concerns over excessive advertising of gambling products in the newly regulated market.

 

The code requires all licensees to make clear that there is no guarantee of winning, and the ads must not suggest that anything other than chance will affect the result. The code also calls for operators to avoid encouraging excessive play, as well as avoid implying or suggesting that gambling can be a solution to financial, professional, personal or social issues.

 

The new policy imposes strict regulations to protect gamblers placing bets in Sweden, including rules regarding bonuses, free spins and advertising. : For example, the new regulations allow private gaming establishments to offer an only one-time welcome bonus to customers, limiting daily specials and collection of loyalty points for cash bonuses and free spins.

 

In April, Sweden’s Minister for Public Administration announced the formation of a commission in charge of determining whether gambling advertising should be banned altogether or partially. The decision is supposed to be made on October 1, 2020.

 

Svenska Spel, the government-owned company that competes against private operators has already decided to stop advertising its online casino products for the rest of 2019.

 

The commission will also consider limits on the size of bonus offers, free-plays, and jackpots, as well as determine whether to restrict all gambling advertising during live sports broadcasts.

 

Regulation of the gambling market is viewed to be a good measure as it will encourage the industry growth, innovation and investment from international operators and at the same will reinforce responsible gambling policy.

 

Would you like to learn more about gambling in other European countries, please see the following:

Italy

Spain

Germany 

Bulgaria

UK, Sweden, Finland

 

 

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