Swedish Government Adopts Bill to Re-Regulate the Country’s Gambling Industry

The Swedish government has introduced new legislation to re-regulate the country’s gambling market.

The aptly named bill,  A re-regulated gambling market, heralds the introduction of a new gambling act and licensing system. This means that anyone operating in the Swedish gambling market must have an authorized license; those who fail to meet this requirement will be shut out, the government said. The new regulations will take effect January 1, 2020.

Stamping out unregulated operators

Accordingly, with the Swedish Gambling Authority (SGA) being granted more tools, it will be able to order Internet service providers to set up warning messages for websites offering unlicensed gambling. Additionally, promoting gambling without a license, for instance through advertising, will be criminalized.

According to Ardalan Shekarabi, Minister for Public Administration, unregulated gambling has taken over, with gambling used in criminal activities.

“It is 14 years since the first of a line of gambling inquiries was appointed. It is now time for us to move from words to action and regain control of the Swedish gambling market,” Shekarabi said.

In addition, to ensure consumer protection in gambling, measures will be taken to limit the negative effects of gambling. A new offense, gambling fraud, will also be introduced, while a special cooperation council will be created to combat match-fixing.

Gambling subject to licensing will be taxed at 18%, whereas, gambling for non-profit purposes will remain exempt. Winnings won by players on unlicensed gambling sites will also be taxed.

“Unlicensed operators will be shut out of the market and licence-holders must conduct their activities in accordance with the law. Today we are also instructing the Swedish Agency for Public Management to follow up the reform to quickly make any amendments to the act if the goals of the reform are not achieved,” Shekarabi added.

It’s hoped, however, that the newly adopted bill will help to change Sweden’s gambling market for the better as it works at protecting vulnerable players within the industry. This is certainly a task that licensed operators will have to undertake as they will have a duty to protect gamblers from excessive gambling.

Dividing the market

The government has said that the Swedish gambling market will be divided into sectors:

  • a competitive sector, primarily including online gambling and betting
  • a sector reserved for non-profit purposes, primarily including lotteries and bingo
  • a sector reserved for the central government, primarily including state-owned casinos and gambling on token machines

Swedish gambling market slows

News of Sweden’s steps to re-regulate its gambling market comes at a time when growth for the sector slowed down in 2017.

According to a press release, gross gaming revenue for the industry rose by 3.2% in 2017 compared with 2016, amounting to SEK 22.6m (£1.9m, $2.69m). This figure, however, was lower than the previous year’s, which was recorded at 5.3%.

Despite this, however, growth appears to be driven mainly by Swedish operators that don’t have permits and are continuing to gain a major market share. Those without permits recorded gross gaming revenue of SEK 5.5bn (£0.5m, $0.66m), which was up by 12.8% from 2016. Those with Swedish permits reported gross gaming revenue of SEK 17.1bn (£1.5bn, $2.04bn), a reduction of 0.5% from the previous year.

Reportedly, in 2017 each Swede over the age of 18 lost SEK 2,824 (£238, $336.54) through gambling. Of that figure, SEK 2,133 (£180, $254.19) was lost to operators who have Swedish permits, and SEK 691 (£59, $82.35) was lost to those without them.

Lotteries and gambling organized by non-governmental organizations recorded unchanged gross gaming revenue last year compared with 2016. The figures show that their gross gaming revenue dropped by 0.4%.