The Re-Regulation of the Swedish Gambling Market Explained

The Re-Regulation of the Swedish Gambling Market Explained

After years of planning the re-regulation of the Swedish gambling market is finally happening. While Norway and Finland are strengthening their gambling monopoly, Sweden has decided to follow suit with Denmark and open up their gaming industry for private actors.

Today marks the day when The Swedish Gambling Authority starts to accept license applications for the new law that will come into force 1st January 2019. Continue reading to learn all you need to know about Sweden's liberalisation of the gambling market.

Quick Summary of Gambling History in Sweden

Gambling in Sweden dates back to when Vikings ruled the lands. Legends say that Sweden even used a game of dice to settle a land dispute with Norway back in the 11th Century. The state gambling monopoly was established in 1934 to combat illegal betting activities. Since then Swedish punters have needed to turn to one of the four state owned landbased casinos, or head to the cruise ships to play on international waters.

With the advent of online casinos, it got harder for the state owned Svenska Spel to control the citizens' gambling activities. The European Commission has long criticized the monopoly and thanks to EU law, Swedes are free to play at any online casino inside the EU. Svenska Spel continues to lose market shares to international operators and the Swedish government has realized that monopoly is not a working strategy in 2018.

Important Points About the New Legislation

Here are the main points from Sweden's new gambling law (SFS 2018:1138):

  • Companies will pay 18% tax for commercial gaming
  • 0% tax rate for non-profit gambling activities
  • Six different types of licenses offered
  • License prices will vary from 400 000 - 700 000 SEK
  • Age limit will be 18+ to play online and 21+ to get entry to physical casino.

Apart from the increased government revenue, the main objective with the gambling re-regulation is to create a safer market. The new legislation focuses on improving consumer protection, game security and giving clear market market conditions.

Players will have the ability to pause their accounts nationwide in a single action. In addition, increased punishments have been introduced for illegal gambling activities and match fixing.

The Six Different Types of Licenses

The Swedish Gambling Authority (Lotteriinspektionen) offers six different gambling license types:

License typeGames includedRestrictions
1State owned gamesCasino games, slot games and some lotteryOnly for state owned companies
2Public purpose gamesSome types of lotteriesOnly for non-profit organisations
3Commercial online gamesCasino games, slot machines and bingo onlineAny company filling the quality criterias
4BettingAll types of online and offline bettingAny company filling the quality criterias
5Commercial landbased gamesSlot games and card games outside a casinoAny company filling the quality criterias
6Cruise ship gamesCasino games and slot machinesShips on international waters

The new legislation will apply for all types of gambling taking place in Sweden or aiming at Swedish players, both offline and online. It will give private operators the chance to compete with Svenska Spel on equal terms when it comes to advertising.

Lotteriinspektionens acting chief executive officer Patrik Gustavsson expects that they will get around 50 to 70 applications, while other sources cite as high numbers as over 100 applicants, which will change the landscape in Sweden completely.

Timeline for the Re-Regulation of the Gambling Market

DateEvent
September 2015The civil minister Ardalan Shekarabi calls for an investigation on gambling re-regulation.
29 October 2015The government appoints Håkan Hallstedt, then general director of Lotteriinspektionen to lead the investigation.
31st March 2017Håkan Hallstedt hands over the 1340 pages long investigation.
9th January 2018A proposal for the new legislation is sent to the Council on Legislation.
5th April 2018The government decides on the detailed bill.
7th June 2018The Swedish Parliament approves the new law.
1st August 2018Operators can start apply for Swedish license.
1st January 2019The new gambling legislation goes live.

As they say, a good plan is half the work and with years of investigations Sweden is well prepared for the new legislation. Industry groups have been emphasizing the importance of an open market for more than 10 years and welcome the new law with open arms.

International operators turn eyes to Nasdaq Stockholm

Sweden is a big player in the casino industry and can boast with leading software providers such as NetEnt, Evolution Gaming and Play'n GO. Many popular casino operators, including Mr Green, Unibet and Leo Vegas, also have their roots in Sweden, but have been forced to establish their headquarter abroad due to the current monopoly situation. Time will tell how many operators decide to move home from Malta.

With the upcoming re-regulation Sweden is increasing its attractiveness as an igaming hub, with many international operators showing interest in Stockholm Stock Exchange. Nasdaq's senior vice-president Adam Kostyal reminds that Brexit also plays a part in this:

The general perception has been that London is the hub, but that is being questioned more and more. Brexit is going to be a disruptor and we have a cluster of companies creating a lot of attention in terms of Stockholm being a natural hub.

The Stockholm Exchange is Nasdaq's second largest in the world, with only US being bigger. Kostyal adds that with the US Supreme Courts decision to reverse the decades long online betting ban many companies are considering a dual listing.

A Clean Slate After Bonus Bonanza

The Swedish Gambling Authority has announced that with the new license system, everyone will count as a new player in their eyes and it doesn't matter if you played at the casino while it was licensed in Malta or not. In practice this means double welcome bonuses, since players can re-register at familiar casinos.

The new legislation also states that operators are only allowed to offer a one time welcome bonus to customers, ending an era of daily specials and collecting loyalty points for cash bonuses and free spins. With this in mind, finding and joining new casinos at regular intervals will be more important than ever.

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