Estimated to around $5 billion, Sweden’s gambling market is currently one of Europe’s largest. Apart from the regulated gambling options provided to local customers by several state-run entities, Svenska Spel being the biggest one, a number of international iGaming operators have been flocking to the country’s gray market and have enjoyed quite a lot of popularity with Swedish customers.
According to the latest industry report compiled and presented by the Swedish Gambling Authority, Lotteriinspektionen, there has been great demand for gaming and betting services in the Scandinavian nation. The estimated average gambling spending of SEK2,158 per person has been used as an illustration of the popularity of this type of services.
While there might be apparent interest in gambling services of different nature among Swedish players, it is important to note that that interest seems to be channeled towards the country’s unregulated iGaming market.
The widespread tech-savviness of Swedish residents and the convenience technology presents before gambling customers has been what has been driving them towards the services provided by unlicensed operators, with those services being better adjusted to contemporary demand. As a result, the gray market gambling services provided in the country accounted for 23% of the whole market in 2016. As reported by Lotteriinspektionen, revenue from unlicensed operators totaled SEK5.1 billion last year. In comparison, the whole market was valued at SEK22.2 billion during the reviewed year.
Here it is important to note that the figure encompassing Sweden’s non-regulated market is probably much larger, given the fact that aside from gray market operators, there are also black market ones that service local players.
How Sweden’s Gambling Market Changed over the Years
The financial reports published by Lotteriinspektionen annually show that regulated gambling revenue decreased significantly from 2010 to 2016 and that unregulated revenue has been on the rise over the past several years.
| Gambling Revenue: 2010-2016 (SEK billion) | |||||||
|---|---|---|---|---|---|---|---|
| 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |
| Overall Gambling Revenue | 39.8 | 41.3 | 41.1 | 40.5 | 38.7 | 21.1 | 22.2 |
| Svenska Spel Revenue | 21.8 | 22.3 | 22.3 | 22.7 | 21 | 8.958 | 8.993 |
As seen in the table above, Sweden’s regulated market was worth SEK39.8 billion back in 2010. Svenska Spel was the biggest contributor to the overall gambling revenue, generating a total of SEK21.8 billion that year.
In 2011, revenue increased to SEK41.3 billion, only to drop to SEK41.1 billion in 2012. From that point on, gambling revenue never saw any significant upward movement. In 2013, gambling services generated SEK40.5 billion, followed by SEK38.7 billion in 2014, SEK21.1 billion in 2015, and SEK22.2 billion in 2016.
The continued drop in gross gambling revenue and the rise of unregulated gambling was what urged Swedish authorities to initiate a review of the state of the local industry and to potentially open the local market for licensed international operations. The results from the review, led by former Lotteriinspektionen General Director Håkan Hallstedt, were revealed this spring and recommended the implementation of a new gambling regulatory framework that would allow interested operators to apply for licenses and to be taxed properly, if allowed to operate in the country.
Said new regulatory framework is yet to be crafted by Swedish lawmakers and it is believed that it will not come into effect before the beginning of 2019. Earlier this month, representatives of the Swedish government and gambling officials at Svenska Spel.
The state-run operator called for gambling laws that would provide fair competition conditions for all industry stakeholders. Svenska Spel officials also pointed out that international operators should undergo thorough probes into their businesses before being allowed into the local market and that the state-run operator will itself monitor for any violations of the laws and any unfair and illicit activities.
Government officials, on the other hand, said that it is not up to Svenska Spel to determine how the industry should be regulated and that the operator might be trying to interfere in the regulatory process in order to benefit its own operations. Here it is important to note that Svenska Spel will lose its monopoly over a number of online gaming services, once the market is opened for licensed international operations.
