What could a change in government mean for Sweden’s regulated gambling sector?
As Sweden’s latest general election draws to a dramatic close, a change of government – for the first time since 2014 – is due to take place in the country, in the form of a centre-right wing coalition led by the Moderate party.
When it comes to gambling regulation, the election could impact three major areas, according to Gustaf Hoffstedt, general secretary of Swedish online gambling association BOS.In conversation with Pierre Lindh on the iGaming NEXT Podcast, Hoffstedt said the partial privatisation of state-owned operator Svenska Spel, the possibility of increased marketing restrictions for licensed operators, and a potential liberalisation of the highly restricted bonusing system are all now very real possibilities.
“Svenska Spel is operating on the market that is still under a monopoly and no political party really suggests privatising that part,” Hoffstedt explained.
“However, it is also operating on the competitive market, against competitors like bet365 and Betsson.”
BOS general secretary Gustaf Hoffstedt: “The state is tempted to also be an aggressive operator on the field, so to speak. It’s usually not a good idea that the player and the judge are the same person.”
“The suggestion from the Moderate Party and the Sweden Democrats is to privatise that part of Svenska Spel, and that is obviously a huge bite of the Swedish gambling market.
“I would welcome such a development, and it is obviously very early still and gambling regulation and possible privatisations will certainly not be on the top agenda for the potential Prime Minister Ulf Kristersson these coming weeks. But finally, when a government is formed, I do believe that this topic will be highlighted.”
Hoffstedt explained that his opposition to monopoly and state-owned gambling operations in Sweden is a moral one.
“I believe that the state should be the rule setter, it should set rules that individuals and companies are obliged to obey, they have to comply with those rules,” he said.
“But in this case, at least in Sweden, but also in many other jurisdictions, the state is tempted to also be an aggressive operator on the field, so to speak. And as you know, it’s usually not a good idea that the player and the judge are the same person – in a football match, for example.”
BOS considers that it would therefore be a positive development for the industry to privatise the commercial side of Svenska Spel, he said.
On the topic of marketing restrictions, Hoffstedt explained the outgoing Social Democrat government recently submitted a bill to Sweden’s parliament suggesting increased regulation on advertising for licensed gambling operators.While the Moderate Party has recommended to drop the bill, it may still go ahead under Sweden’s new government, and in that case, may mean even harsher restrictions are introduced for the industry.
In his assessment, however, Hoffstedt believes the bill will “have a hard time” finding support in the new-look Swedish parliament, adding that BOS will support those MPs who are hesitant to move the bill forward. “It is obviously a core value for the licensing system that licensed operators can market themselves and their products,” he said.
One of the principal arguments for allowing gambling marketing by licensed operators is to secure high channelisation rates in the regulated market.
A major barrier to that in Sweden so far has been the imposition of tight restrictions on bonus offers, where only one welcome bonus on sign-up is permitted. This has caused many customers to seek out more generous promotions on the often unprotected websites of offshore operators.
BOS general secretary Gustaf Hoffstedt: “Every fourth Swedish kronor, when it comes to online casino, actually leaks out of the licensing system.”
“No politician really wants to be outspoken when it comes to liberalisation of the bonusing system,” Hoffstedt explained.
“But at the same time it is obvious that we pay an extremely high price with the harsh regulation that we have today. Namely, that a lot of the Swedish online gambling customers prefer the unlicensed offer out there.”
“Every fourth Swedish kronor, when it comes to online casino, actually leaks out of the licensing system. And the Moderate Party [when reacting to the bill proposing increased marketing restrictions, also suggested] at least minor liberalisations when it comes to the strict prohibition on loyalty bonuses for online casino. Obviously, we support that suggestion as well.”
While gambling regulation is unlikely to be at the top of Sweden’s incoming government’s list of priorities, iGaming NEXT will follow up on this story when more information becomes available.Sweden’s Social Democrat Prime Minister Magdalena Andersson will officially resign from her post today (15 September), handing power over to a four-party right-wing coalition.
Although Andersson’s Social Democrats still emerged as the single biggest party after Sunday’s vote, the other left-wing parties did not have a majority of seats overall.
The Sweden Democrats won the second biggest share of the vote, and will now seek to form a government with the conservative Moderates, Christian Democrats and Liberals, who between them secured a slender three-seat majority, with 176 seats to 173.
They will initially be tasked with forming a new government, so any changes to the country’s gambling legislation are still some way down the line.