‘Monopoly’ No More? Sweden Set To Open Up Offshore Gambling Sites To Licensure

That comes after what has been a long and extremely politically charged process on iGaming.

In a monster report by the Swedish government, Håkan Hallstedt proposes that the online gambling market open up to competition. However, it recommends that the state monopoly Svenska Spel should retain control over gambling terminals and land-based casinos.

The text of the 1,340 page report in Swedish is available here.

Sweden’s current laws give Svenska Spel a monopoly over online gambling. Those laws have been declared to be in violation of EU treaty law and the country has been taken to the European Court of Justice by the EU Commission.

As a result, offshore operators have been able to operate with legal immunity. Attempts to prevent them advertising have all failed.

Unibet currently spends more on advertising in Sweden than Svenska Spel, according to figures from the Sifo Advertising Measurements research consultancy.

If the government accepts the report’s conclusions, the Swedish Gambling Authority will gain the authority to issue licenses to operators such as Bet365, Unibet and PokerStars.

The report’s recommendations aim to switch 90 percent of players away from the unlicensed market into the new regulatory regime.

Highlights of proposals for online gambling

• Poker operators will be able to share liquidity with the international player pool
• License fees will range from SEK 60,000 to SEK 700,000 ($6,600 to $77,000)
• Annual supervisory fees will range from SEK 30,000 to SEK 1,000,000 ($3,300 to $110,000)
• Gambling taxes will be 18 percent of gross gaming revenue
• Payment service providers that serve unlicensed operators will be guilty of a criminal offense
• There will be a trial blocking of payment transactions between unlicensed operators and players
• Internet service providers must display a warning to visitors to gambling websites without a license; ISPs will not block access
• Fines from SEK 5,000 to SEK 50,000,000 ($550 to $5.5 million) will be levied on operators without a license targeting the Swedish market

Impact on existing operators

The major operators currently active in the market should see benefits if they acquire new Swedish licenses.

The regulator will be able to take action against unlicensed operators and end any advertising in Swedish media. This should result in some market concentration in the hands of the licensed operators.

The overall revenue impact may not be large. Sweden’s population is roughly the same size as New Jersey. Those players currently using Svenska Spel services may be slow to migrate to the new licensees.

The political process could still take years

The Swedish government remains under pressure to reform its gambling laws. But there is still plenty of opposition to market liberalization.

In April last year, Svenska Spel Chairwoman Anita Streen left the company. apparently because she opposed the government’s liberalization plans.

She told Dagens Industri (paywall):

“For a social democracy it has always been important to have a clear social responsibility, and [Svenska Spel] has had an efficient gaming policy which has been of great importance for social causes. Now it is on the way out.”

Her replacement is Erik Strand. He is more supportive of the government’s policy.

Streen’s conflicted position is replicated among many politicians who don’t accept that a wholesale dismantling of the Swedish regulatory model is necessary under EU law.

The government is likely to introduce legislation based on the report’s conclusions at some time in 2017. But given the contentious nature of the issue, it could be two years before the law changes. It will be even longer before Sweden issues the first new licenses.

At the earliest, the first offshore licensed operators could be up and running in the first half of 2019.

Image credit: RPBaiao / Shutterstock.com