Sweden struggles to evaluate impact of Covid-19 online casino restrictions with problem gambling rate unchanged

The Swedish Gambling Authority (Spelinspektionen) has failed to reach a clear conclusion on the impact of deposit and bonus limits for online casino that were implemented due to government concerns over harmful gambling behaviour during Covid-19.

The regulator was tasked with evaluating the restrictions in its interim report for a government assignment on the topic. Despite publishing a 41-page document on the subject, it was not able to reach any meaningful conclusions due to a combination of factors.

“The Swedish Gaming Inspectorate assesses that the re-regulation of the gaming market that came into force in 2019, the pandemic and the temporary regulations all interact for public health and for consumer protection.

“However, it is difficult to assess which parts of the development are due to the temporary regulation, the pandemic or the new gambling regulation. It is not possible to determine what the development of gambling and problem gambling would have looked like if the temporary regulation had not been introduced.”

The restrictions included a weekly SEK5,000 deposit limit for online casino gameplay with licensed operators, as well as a requirement for players to specify their log-in times and a SEK100 cap on bonuses.

These regulations were expected to be extended beyond their February 2022 deadline, albeit at a reduced level of SEK4,000 for deposits. However, the reduced restrictions never came into force and the caps were withdrawn by operators in line with the original timeline.

Sweden’s Minister for Social Security Ardalan Shekarabi was behind the restrictions. He said the risks in the gaming market required tighter consumer protections during the pandemic in order to protect the most vulnerable members of society.

However, the Spelinspektionen report indicated the proportion of problem gamblers was unchanged compared to the time before the pandemic and the temporary regulations, although it did find that gambling, and gambling problems, may have increased for those who already had gambling problems before the pandemic.

Elaborating on its stance, the regulator said: “It is currently not possible to determine what impact the pandemic has had on this development. Against this background, it is also not possible for the Swedish Gaming Inspectorate to assess the consequences of the temporary regulation for public health.

“It is also not possible to determine what the development would have been like if the temporary regulation had not been introduced. Although it has only been investigated to a limited extent, there are signs that the temporary gambling liability measures were supported by the players,” it added.

The regulator’s assessment was further clouded by the fact that some licensees were able to circumvent the restrictions if they offered both online casino and online sports betting.

The full report can be accessed here.

Swedish-licensed operators have argued against the temporary restrictions from the day they were proposed, insisting there was a lack of evidence that the Covid-19 pandemic and lockdowns triggered a rise in either gambling activity or harmful behaviour.

They also feared the limitations would drive consumers towards the offshore market in search of more attractive offers, which has fewer consumer protection measures and would have a destructive impact on the channelisation rate in Sweden.

According to H2 Gambling Capital, Sweden’s channelisation rate was estimated at between 86% and 88% during the period between Q1 and Q3 of 2021.

The regulator again failed to pinpoint a significant conclusion here. It said: “Based on the information that the Swedish Gaming Inspectorate has available today, it is difficult to say whether the degree of channelling has been affected by the temporary regulation.”

Gustaf Hoffstedt, general secretary of Swedish-licensed operator trade body BOS, told iGaming NEXT: “There is a political temptation in every crisis to take action. Ideally good measures. In the absence of good measures, bad measures will suffice, as long as you can show that you are taking action.

“Not taking any action at all can be interpreted as passivity, which is a politician’s nightmare. The Swedish government had the bad judgment to face the pandemic with measures in the area of gambling, where the effect on public health cannot even be measured or evaluated.

“By way of comparison, the Danish government refrained from special pandemic measures for the gambling market. It probably had a better impact on the wellbeing of Danes, than what in Sweden appears to be meaningless measures that only created extra work in the compliance departments of gambling companies,” he added.