Swedish gambling market surprises: Unexpected result

In Sweden, the vast majority of gamblers choose safe, legal providers. Spelinspektionen, the Swedish gambling authority, has calculated that in 2023, no less than 86% of players wagered their money with licensed providers. This is a great success. Especially when you consider that before 2019, less than half of gamblers opted for legal options.

The turning point: the introduction of the licensing system in 2019

Until 2019, the Swedish gambling market was a bit of a mess. Illegal providers were free to do their thing, and the government had little control over the situation. But that changed drastically with the introduction of a licensing system. From that moment on, gambling companies had to adhere to strict rules if they wanted to operate in Sweden. And that worked: more and more people started playing with legal providers.

Spelinspektionen has come up with a smart method to measure how many people gamble legally. They look at four things: the results of a player survey, the internet traffic to gambling sites, the turnover of legal providers and data from the research agency H2 Gambling Capital. By combining these factors, they arrived at 86% for 2023.

How Sweden gambles: a better insight

Camilla Rosenberg, the director of Spelinspektionen, indicated that these figures show how well Sweden has a good picture of the gambling market. She emphasized that the channelization rate (the percentage of people who play legally) varies depending on what kind of games the players choose and how they play. The system they are now using gives the authorities the opportunity to better understand how the market behaves and where they can intervene to combat illegal gambling practices.

But the work is not done yet. Despite the progress, some companies still operate in a gray area. They do not have a license, but they do not directly break the law. This remains a challenge for the Swedish government.

The battle against the grey zone

To tackle this grey zone, Spelinspektionen has advised the government to tighten the gambling law. The idea is to gain more control over companies that are currently circumventing the rules. If these plans go ahead, Sweden would be able to regulate the gambling market even more tightly. Which would offer players more safety.

In the meantime, Spelinspektionen is conducting an in-depth investigation into the largest illegal gambling companies. They want to better understand how these companies operate, so that they can act more effectively. This investigation should help to better protect consumers and make the Swedish gambling market even safer.

Increase in gambling tax: a possible game changer?

Despite the success of the regulated market, the future of the channelling could come under pressure. This is due to the increase in gambling tax. The Swedish government has decided to increase this tax from 18% to 22%. The government thinks that this will generate more tax revenue. Not everyone agrees.

The consultancy Copenhagen Economics has warned that this tax increase could be counterproductive. Their research shows that the higher tax could actually cause the canalization rate to decrease. They predict that this could cost Sweden between SEK 40 million and SEK 203 million in tax revenue. They also fear that the social costs, for example due to more problem gamblers, could increase by as much as SEK 41 million.