Swedish Gambling Market Still Losing Out to Unlicensed Operators

Quarterly figures released this week show that Sweden’s gambling market is still losing out to unregulated and unlicensed providers that operate in the country.

Licensed firms have found themselves given the cold shoulder compared to their unlicensed counterparts, according to figures that are due to be made public by the country’s gambling regulator.

The announcement comes ahead of the new iGaming regulations that are set to be introduced in early 2019. These new rules are an attempt to shift Swedish gamers from unregulated online operators to licensed operators that work with the country’s Lotteriinspektionen regulator.

Gaming revenues up

The statistics show an increase in gross gaming revenue in Sweden to SEK16.8bn for the first nine months of this financial year, which equates to a 1.2% increase. The Lotteriinspektionen noted that it is important to remember that the revenue generated by licensed operators fell over the same period.

Of that SEK16.8bn, only SEK12.2b was generated by regulated operators in the first three quarters of 2018, which is down 2.4% on last year. While licensed operators saw their revenue falling, unlicensed service providers saw an increase in revenue of 12.4%, to SEK4.5bn.

Lotteriinspektionen said in its report that local operators account for 73% of the gaming market in the country, with the other 27% being non-Swedish gaming companies.

Online or land-based

Online gambling in Sweden experienced significant growth in the third quarter of the financial year, with revenue increasing by 12.9%, while land-based gaming saw an increase of just 8.2% over the same period.

Online betting proved particularly popular, growing by 13.6% compared to the same period in the previous financial year. The online casino sector also saw positive results in the year running up to the end of Q3 with growth figures of 11.9%, according to the Lotteriinspektionen.

These online revenue increases come after licensed gambling operators were banned from providing online casino games under Sweden’s current gambling laws. The figures in the online casino sector are therefore based solely on internationally based operators that have players based in the country.

There are currently only four land-based casinos in Sweden, all of which are known as Casino Cosmopol. They are located in Sundsvall, Stockholm, Gothenburg and Malmo.

Gambling black market

An estimated $300m of Swedish gambling revenue in the last quarter was generated by illegal companies operating in the country. Sweden has not banned online gambling and gaming outright, but it has set some strict regulations in place for companies licensed in the country.

In an attempt to crack down on unlicensed and illegal gaming companies, Sweden plans to enforce significant fines on companies that are found to be operating outside of the law.

The new adjustments will allow regulators to enforce the fines that come into play on 1 January 2019 and will affect all operators that are unlicensed and/or offer banned products to Swedish players online.

The new regulations have been in the works for more than 18 months and apply to both online and land-based casinos in the country. They also extend to lotteries, betting shops and cruise ships that offer casino products too.

The changes in regulation will also make it easier for online gaming companies to apply for a license, in a move aimed at making regulated gaming more accessible and removing the attraction of unregulated operators.

The license application process opened in August 2018 and is operated by the Lotteriinspektionen.

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