How the New Regulation Will Help Shape the Online Gaming Environment in Sweden
Posted in Industry September 11, 2018

How the New Regulation Will Help Shape the Online Gaming Environment in Sweden

For years, Sweden has enjoyed a special place in the global gaming environment. As one of the most advanced digital economies in Europe, Sweden shows a special affinity with online gaming, powered by high consumer enthusiasm and acceptance. Some of the biggest names in online casino gaming also trace its roots to this Scandinavian country, including Betsson and the Kindred Group. On top of these top two global gaming brands, other companies with Swedish roots are Evolution Gaming and NetEnt which have thrived online and helped set the trend for online casino entertainment online. Add the long list of affiliate sites operating in the country, and you have a complete picture of an extensive online gaming community based in Sweden.

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From a ‘Grey Market’ to Regulated

While it’s considered as a thriving base and inspiration for online gambling, the gambling laws are not as comprehensive and strict, and its authorities did little to clamp down on casino operators that target the players from offshore jurisdictions. This makes Sweden as the most popular ‘grey market’ in Europe, with unprecedented customer enthusiasm on the game, but with a non-regulated and traditional gaming market. Now, this ‘grey market’ tag is about to go down thanks to new regulations that have been approved thanks to a unanimous vote made by the Swedish Parliament.

Voting unanimously to approve a bill that will help regulate the online gambling market, Sweden sets the ball rolling for a marked improvement, from a grey market to a modern, liberalized and fully regulated market. And since Sweden is considered as the most important ‘grey market’ in Europe, the move towards a taxed and more regulated market can definitely influence the gaming sector and create trends in the next few months.

How Sweden Moved to a Regulated Space

Before regulation, the Swedish market is dominated by two gaming monopolies – Svenska Spel and ATG. In 2017, the two gaming giants combined to control 58-percent of the gaming market. The two companies have dominated the scene, and when the news about regulations broke, they did not waste time in airing their concerns. While it’s expected that they will fight for their place post-regulation, the wheels for regulation did not stopped. The move to become fully regulated took years, and all the efforts of supporters and policy makers took shape in the last few years.

Two crucial developments were the success story of Denmark, with its successful take on a regulated market and the lower-than-expected gross gaming revenue (GGR) tax rates at 18%. And in April 2017, the government finally released the results of the report, paving the way for a regulated market, boasting a tax at 18-percent level without putting too much administrative burden on the government. The same report also predicted that with regulation, this will help boost a 90% channelization of all iGaming customers into a licensed environment.

What Happens Next?

Based on the proposal of the Swedish Government, the regulations will officially begin on January 2019, with the submissions of licenses applications starting in July 2018. according to the Minister of Public Administration Ardalan Shekabi, the proposed regulations will ask the applicants to comply with the Swedish rules. He added that the new regulations and laws will give them the tools to keep operators without licenses out of the market. And finally, he shared that the new laws come with tighter penalties for unlawful gambling and fraud.

For industry insiders and stakeholders, the regulations and opening up the market through new licenses are expected to bring long term benefits, as shown in the Denmark experience.
According to one representative from Every Matrix, the new regulated environment will bring in the same benefits as experienced by the Danish gambling market. He expects that when the new regulations are already in place next year, these can boost spending and marketing activity. Other insiders and industry watchers also see a silver lining with the move to become fully regulated. Many are expecting that with a move to a regulated space, the whole value chai will lead to innovation and even new products.

According to one representative from Redeye, a fully regulated Swedish gaming environment will create more affiliations, payment solutions and platform providers.

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ATG, Betsson, Every Matrix, Evolution Gaming, Kindred, Licensing, NetEnt, Regulation, Svenska Spel, Sweden

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