Gambling Companies among Biggest Advertisers in Sweden, Recent Report Finds

Gambling operators have been ramping up their advertising efforts in Sweden ahead of the regulation of the country’s gambling market, media research firm Kantar Sifo said in its latest report on the advertising activity in the Scandinavian nation.

Three gambling entities, including the state-run Svenska Spel, made it to the list of the organizations to have spent the most on different forms of advertising in 2017, Kantar Sifo reported late last week.

Grocery retailer ICA was the biggest spender in Sweden last year in terms of advertising costs generated, followed by Procter & Gamble and Kooperativa Förbundet.

Svenska Spel, Sweden’s state-run gambling operator that currently holds the monopoly over the provision of most forms of gambling in the nation, made it to seventh place in the Kantar Sifo’s list. It spent SEK472.27 million (approximately $58.6 million) on different forms of advertising last year, ramping up its marketing spend by 19.6% from a year earlier.

Kindred Group spent the total amount of SEK443.09 (approximately $55 million) on different marketing initiatives in Sweden, up 12.26% from 2016. LeoVegas was the company to register the largest increase in advertising costs. The gaming company invested SEK314.02 million (approximately $39 million) into ads of different nature last year, reflecting an increase of 83.2% from a year earlier.

Commenting on the above figures, Tero Marjamäki, a spokesperson for the Swedish Advertising Association, Sveriges Annonsörer, said in a statement that gambling companies are strengthening their positions in the Swedish gambling market ahead of its planned reorganization by increasing their marketing budgets.

Mr. Marjamäki further noted that television and outdoor advertising were the most popular advertising channels among gambling operators. It also seems that the Internet has also grown in popularity as an advertising channel among international companies that target Swedish players namely via the Internet.

Crackdown on Gambling Ads and Market Reorganization

The latest report on the growing advertising budgets of gambling companies was published shortly after Lotteriinspektionen, Sweden’s gambling regulator, issued a warning on local newspaper Metro to stop featuring ads of foreign operators on its pages.

The regulatory body pointed out that the media outlet was violating the country’s Lottery Act by advertising gambling companies that were not authorized to operate in the country. Metro was further warned that it might face a penalty of SEK250,000 (approximately $31,000), if it kept featuring gambling-oriented advertising content.

Meanwhile, the Swedish government has entered the final stages of the planned reorganization of the country’s gambling market. Following the publication of a review into the Swedish gambling industry that recommended its opening to international operations, the nation’s lawmakers crafted a draft legislation on the provision of gambling services.

Under what would be Sweden’s new gambling law, foreign gambling companies will be able to apply for licenses from Lotteriinspektionen and to operate in a regulated environment. The Swedish government submitted the regulatory framework to the European Commission in December 2017, which means that the legislative piece is currently in a three-month standstill period and no actions cannot be taken on it during the EC’s ongoing review.

Sweden’s gambling law is expected to take effect on January 1, 2019. The Scandinavian country has already drawn a great amount of interest from some of Europe’s and the world’s largest gambling companies, many of which hail namely from Sweden.

According to figures from Lotteriinspektionen, the nation’s gambling market was worth SEK16.6 billion (approximately $2.05 billion) during the first three quarters of 2017, up 3% from a year earlier. Sweden’s unregulated market increased 11% in the reviewed period to SEK4.045 billion (approximately $500 million).

Here it is important to note that Lotteriinspektionen’s calculations on the size of the country’s gray market are only rough ones and that it is probably much larger in terms of revenue generated.

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