Private operators are set to become legal in Sweden for the first time, as the government is rewriting the country’s gambling legislation, opening the market to a wide range of new operators.
Despite strict gambling measures, recent figures for the country show usage climbing, which the Swedish Gambling Authority puts down to misuse by operators. In their published figures from March 2018, they estimate that Sweden’s gross gaming revenue sits at SEK22.6bn ($7.6bn/£5.6bn). This is thought to be originating from companies that operate without Swedish permits because the gross revenue for these organizations is estimated at SEK5.5bn ($630m/£464), which amounts to a 12.8% rise over 2016.
A growing online market
The Swedish gambling market was valued at around SEK5.6bn ($640m/£427) in Q1 of 2018, a 2.8% increase over the same period in 2017. The Lotteriinspektionen, the country’s regulatory body for gambling, estimates that half of the last quarter’s gambling revenue came from the online sector. Web-based gambling generated approximately SEK2.8bn ($320m/£236m), with casino games and betting being the main drivers of this revenue. Online gambling figures rose by 16% over the previous financial year, compared to an 8% slump in the IRL gambling space.
Swedish government adjusting to the changes
New legislation is being considered by the Swedish government, which is due to overhaul the country’s licensing system. The current consensus is that the system needs to be reviewed because it has generated a monopoly and a more competitive marketplace is desirable. Therefore, it is thought that new legislation will be approved without too much opposition. Proposals would see the Lotteriinspektionen operating a licensing system, which would lead to the wider market being regulated. With the updated licensing system due to launch in early 2019, registration for operators to apply for a license will likely open in August of this year.
Specific regulation for iGaming
In December of last year, the Swedish government submitted a new set of legislation relating to iGaming to the European Commission. Interestingly, the Commission did not return any negative feedback; in essence, that means that the legislation is approved. The legislation submitted in late 2017 was a precursor to the latest set of rules the Swedish government is seeking to implement, with the focus being on regulating the market space and allowing the Lotteriinspektionen to collect fees for licensing. As it stands, the market split in revenue between licensed and unlicensed operators is SEK17bn ($233m/£172m) and SEK5bn ($581.6m/£428.9m) respectively. The government is hoping to significantly reduce the level at which unlicensed firms are operating. The extra work the government will put into regulating the market will result in a major increase in financing for the Lotteriinspektionen so it can meet demand from corporations requesting licenses.
Sweden a safe bet?
What’s good to note is that the Swedish gambling market is buoyant and steadily growing year-on-year. While it is not growing as rapidly as other emerging markets, the government’s approach to the increased interest will allow companies and consumers to work in a safe and regulated environment. It does not seem that the government is looking at the introduction of licensing solely as an extra source of income, but it would appear that lawmakers are taking time to understand how the gambling market is operating in the country and they are seeking to improve how it works for all parties involved. Hopefully, the ability for iGaming companies to work closely with the government to develop new legislation will see the country’s market continue to increase as it has over recent years.