Assessing the Demands of Sweden
The Swedish trade organization for online gambling BOS is lashing out against the stringent rules of the gaming authority Spelinspektionen, claiming they've led to a decline in licensed online gambling participation. Here's what you need to know about the controversy.
Are the Regulations Too Harsh?
As per a recent report by Spelinspektionen, the Swedish online gambling market is currently experiencing a growth in revenue, but at the same time, a decrease in participation in legal online gambling offerings. Now, BOS, a Swedish trade association for online gambling, is pointing fingers at the authority for this setback.
BOS believes that Spelinspektionen's crackdown on licensed gambling operators is too harsh and counterproductive. In fact, the report suggests that these restrictions have allowed unlicensed websites to increase their market share. The Swedish Gambling Authority states that the proportion of licensed gambling in Sweden ranges from 85% to 87%.
Before these restrictions, this figure was much higher - 91%. As a result, the government's target of having at least 90% of Swedish gambling revenue coming from licensed providers has missed the mark.
Deteriorating Turnover Figures
Since the new regulations, which opened the Swedish market to foreign gambling operators in January, expectations were high. However, turnover figures have been falling since then. The latest quarterly data from Spelinspektionen shows that overall gaming sector turnover dipped by 3.5% from Q2 to Q3, while online casino turnover increased slightly.
Total turnover in the gaming sector was around €574 million in Q3 2019. On the flip side, only licensed online casinos experienced a revenue increase, from €325 million in Q2 to €326 million in Q3.
One drawback of the data is that it does not provide a clear picture of the illegal operators' revenues. Market research firm H2 Gambling Capital estimates that unlicensed operators are raking in between €46 and €56 million.
Pressure on Gambling Authorities
With the unlicensed sector experiencing growth, the gambling authorities are catching heat. BOS maintains that the increase in illegal gambling is a direct result of Spelinspektionen's stringent regulations. Based on recent developments, BOS Secretary General Gustaf Hoffstedt said:
"Anyone who has witnessed the political turmoil and the massive fines leveled against licensed gambling firms can't be surprised by this trend. In my opinion, the drop in revenue is part of a pattern. Unless the government takes stronger action to protect its regulations, the legal online gambling channelization will likely continue to decline."
Hoffstedt isn't alone in this viewpoint. Douglas Roos, owner of betting provider Ladbrokes Nedn, shares similar thoughts. He has been advocating for modern Swedish gaming regulation for 15 years but feels the government's current approach is unacceptable. Instead, it's focusing on licensed companies that pay billions in taxes, imposing huge fines in the process.
Notably, fines of €1-2 million have been slapped on reputable operators such as LeoVegas and Cherry in recent months. Global Gaming lost its Swedish license in June due to alleged "serious deficiencies," and their appeal in August was denied, forcing the company to surrender its recently acquired license.
Coming Up: More Restrictions?
Despite the criticism, Spelinspektionen has vowed to maintain its strict regulations and steep penalties for violations of the new gambling license system. Additionally, further marketing restrictions are planned for licensed operators, including bans on certain gambling products and a total ban on gambling advertising.
BOS Spokesperson Hoffstedt warns against these moves, stating:
"The government's approach of discussing marketing restrictions for licensed online casino operators in this situation, and banning certain popular gaming products, indicates that they don't grasp the gravity of the situation. Such measures would effectively hand the Swedish gambling market over to unlicensed operators. The government is currently supporting the black and gray market, and this needs to stop."
BOS fears that additional restrictions could make it harder for licensed providers to compete with the illegal sector. As it stands, the attractiveness of the Swedish market to European operators might also decrease if Spelinspektionen continues to impose its guidelines and approaches. Stay tuned for more developments.
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Source: www.onlinecasinosdeutschland.com
