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Sweden online gambling regulation: a failure story?

Gambling regulation in Sweden appears to be a mare’s nest. After a few months of hope that the gambling market will be regulated and flourish (with the extra hope of decoying the other Nordic countries), there’s little progress made and lots of problems creates. Here’s the whole story:

Sweden brought in new laws on January 1st, 2019. These laws ended the state-run online gambling company’s (named Svenska Spel) monopoly. The market was opened to private gambling operators from all around the world. There was a total opening of the gambling market (casino games, sports betting, bingo etc.).

Swedish Gambling Authority born

Obviously, many companies were interested of obtaining a license. Even those that, in theoretically closed market, were able to operate. According to official data, in 2018 private gambling companies have captured a 29% of Sweden’s turnover. The total amount spent to gambling is no less than USD 2,5 billion.

The Swedish government has been dragged to this decision, enacting new gambling reforms, for two reasons. They realized that they couldn’t turn a blind eye any more to such amount of money and they desperately needed the tax. So, the Swedish Gambling Authority (names Spelinspektionen) was born. 

The interest was tremendous. In the first months the authority has licensed around 100 companies to accept Swedish gamblers. They also advertise themselves, as Swedish residents could make their pick from the best gambling sites. It was a great benefit for the government too, as legalization of online gambling is a quickfire way to bring in more tax revenues.

A 18% tax for licensed operators

According to the laws passed, licensed operators must pay a tax worth 18% of their profits from Swedish customers. These tax payments come into effect in 2019;. 

The Swedish gambling reforms have struck a balance between giving players freedom to choose and protecting them from untrustworthy gamblers. Promotion of gambling without a license has been banned and the Spelinspektionen has been granted the power to block transactions between players and unregulated operators.

However, things didn’t go according to plan. Their 2019 saw the number of reported gamblers in Sweden fall by about 6% from the numbers in a similar survey taken just after the market opened last year. This is shocking news for a country with lots of high rollers both in sports marketing and in casinos.

According to a detailed article posted on www.online.casino, Spelingspektionen has put fines all around, but only one of the 50 companies that have faced fines this year has paid it. This is a company operating in Aland Islands, a Swedish-speaking autonomous island area of neighboring state of Finland. The rest are challenging their fines in national courts or they’re just leaving the Swedish gambling market for good.

The last case won was by UK-based operator VideoSlots. They complained the government has handed them an initial two-year license, as opposed to the five-year deal offered to others.

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