A government-commissioned report will propose on Friday that the Swedish gambling monopoly system be scrapped, Reuters reported on Wednesday citing an unnamed source.
Swedish politicians previously called for a review of the country’s gambling industry to be conducted. The review was aimed at finding out whether Svenska Spel’s monopoly should be put an end to in favor of a more liberal licensing system. Work on the report commenced in 2015, a year after the European Commission warned Sweden that it would be sanctioned, if it did not craft gambling regulations that complied with EU requirements for free distribution of services among member states.
Led by Hakan Hallstedt, Director General of Lotteriinspektionen, the Swedish Gambling Authority, the review will reportedly recommend that foreign online gambling operators be able to apply for a license and operate in a regulated environment.
Sweden is a popular destination among some of the world’s largest online gambling operators. The high gross national income per capita and the high rates of Internet and smartphone penetration have been among the factors that have made the country a gambling-friendly hub.
Swedish consultancy firm Mediavision AB reported last month that the likes of bet365, Kindred Group, and Betsson reported a 16% increase in turnover from local players in 2016. In comparison, Svenska Spel’s brands saw a 2% turnover rise during the same period. Foreign operators had around 70,000 to 120,000 active Swedish customers every month in the second half of the year. It is believed that activity will only increase in the months and years to come as gambling products are offered on a number of channels, mobile included.
According to data published by Lotteriinspektionen, the Swedish gambling market was worth SEK22.2 billion in 2016. Unlicensed iGaming operators generated a total of SEK5.1 billion in revenue in the twelve months ended December 31, 2016. Operating in an unregulated gray market, none of their proceeds were contributed to the country’s coffers.
However, if Sweden eventually regulates its online gambling market, it is believed that operators will be taxed at 18% on gross gaming revenue. The tax is a bit higher than the ones those same operators pay in other regulated jurisdictions. Yet, given the local market’s potential, the higher tax rate is not likely to cause a massive withdrawal of big industry names.
Here it is important to note that Svenska Spel will not lose its status of a state-run monopoly completely. For instance, the agency will keep its exclusive rights to run casinos and lottery operations within Sweden’s borders.
The full scope of the government-commissioned report will be revealed on Friday, March 31, when it will be published, according to Reuters. It is yet to become known whether the government will follow the recommendations and if and when the local market will be regulated. However, it is believed that lawmakers will do their best to complete the task before the Swedish general election in September 2018.
