Are Strict Regulations Suffocating Swedish Gambling Industry?

By | July 15, 2021

iGaming became a regulated market in Sweden after the passing of the gambling law in 2019. This was a notable moment for the industry as many gambling operators held high hopes for the Swedish market.

In the course of the last two years, Sweden’s government, however, only tightened the regulations, adding low gambling limits and hefty penalty fees for the operators. This, naturally, caused a disruption among the operators and led to decreased channelization and many players switching to the black market. The latest news on legislation also reports that the new advertising bans for the industry will soon be in place. How will the market react to this measure?

Experts’ insights on the regulations

During the webinar “Sweden: Is the dream dying?”, held at Casino Beats Summit, experts gave various insights into the Swedish regulations.

Peter Jesko, the lead data analyst at Casino Guru, doesn’t share the common pessimistic view on the Swedish iGaming market. While the expert acknowledges that the legislation creates numerous difficulties for the operators, namely for the smaller ops, he believes that many other countries have even worse conditions. For instance, the Netherlands and Denmark set the gambling taxes up to 30%, as opposed to the Swedish 18% gambling levy. The industry, however, has no other choice than to adapt to the changes.

Robert Andersson, CEO at Acroud, states that instability is one of the biggest drawbacks of the Swedish gambling law, as the government constantly adds numerous amendments and adjustments to the legislation. The expert also agrees that tight regulations will inevitably transform the Swedish iGaming market, leading to consolidation among the gambling companies. The bigger firms are going to weigh out the smaller players, who will be forced to operate outside the regulation.

Right from the start, the legislation created harsh conditions for casino operators, fining for the slightest misdemeanors those who wanted to get a license in uncertain terms of a new market. Under these circumstances, the licensed ops can’t compete with the attractive offers of the black market and lose players. 

Jesper Kärrbrink, creative director at Green Jade Games, considers Sweden to be a mature iGaming market, thus, the almost 20% growth of the last years can’t be expected anymore. This doesn’t mean, however, that the industry will stagnate or decrease, as the expert predicts it to grow at a much slower pace (around 7-10% a year).

Kärrbrink has also criticized the upcoming restrictions in gambling advertising, arguing that operators should have a right to promote good licensed products. The expert also believes that the main goal of iGaming regulation is to protect vulnerable players, and the marketing ban won’t help in combating problem gambling. In the case of protecting minors, the gambling specialist reminds us that the underaged aren’t allowed to play at Swedish online casinos, as the social security number is needed to register on the platform.

When answering the question about channelization, which has decreased from 95% to 75% since 2019, all experts have unanimously said that the authorities should focus and work towards increasing this factor, instead of imposing harsh restrictions on licensed ops.

Read more: Guide on obtaining gambling license in Malta

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