Swedish trade association BOS has criticised a government proposal to ban the use of credit cards for online gambling.

The industry body argues that such legislation would “hand yet another competitive advantage” to the unregulated gambling market.

BOS pointed to the issue of channelisation and estimated that unlicensed operators currently occupy a 41% market share for the online casino vertical in Sweden.

“The risk is great that unlicensed gambling will overtake and gain a larger total market share than licensed gambling in 2024,” said BOS secretary general Gustaf Hoffstedt.

“The government needs to change focus and show that it is on the same side as the licensed gambling companies and the safeguarding of consumers,” he added.

BOS has further accused the Swedish government of ignoring the conclusions of its own investigation into the prospect of a credit card gambling ban.

The government’s Over-indebtedness Inquiry – conducted last year – concluded there were “insufficient reasons” to prohibit gambling with credit cards.

The resistance was based on potential technical difficulties with banking providers, which caused doubts over the likelihood of being able to practically implement the ban.

“It is sad that the government does not listen to its own expertise and instead proposes a ban on credit cards when gambling, contrary to what the government investigation has concluded,” said Hoffstedt.

“Interestingly, the government does not propose a corresponding credit card ban for the purchase of alcoholic beverages, which in Sweden is only offered by a retail monopoly owned and operated by the government itself,” he added.

The ban is proposed to enter into force on 1 April 2025.

Online gambling with credit cards is banned in many online gambling markets, including the UK, Ireland, Australia and Norway. The UK veto extends to digital wallets.

Sweden’s financial regulator has given FDJ the green light to proceed with its acquisition of Kindred Group.

The Swedish Financial Market Supervisory Authority (SFSA) has approved FDJ’s offer document for the Stockholm-listed operator.

As such, the public offer will open tomorrow (20 Feb) and run for 39 weeks. Kindred needs to approve changes to its statutes to approve the compulsory purchases of its share capital.

The Unibet operator has therefore called an Extraordinary General Meeting on Friday 15 March to amend its articles to allow this to take place.

This is Kindred’s second attempt at approving the required changes in an EGM after shareholders representing just 42.16% of share capital voted in favour on 16 February, below the required 75% threshold.

The deal itself remains subject to Kindred achieving other required regulatory approvals. Overall, FDJ must acquire 90% of Kindred’s total capital for it to go through.

The French lottery giant is offering SEK 130 (€11.57) per share as part of the deal, which would value the company at around €2.6bn.

Kindred’s board has unanimously recommended that shareholders accept the offer.

Activist shareholders push for sale

So far, several Kindred shareholders have already approved the agreement, representing 27.9% of the company’s total capital.

These include activist investors Corvex Management and Eminence Capital, as well as Premier Investissement SAS, Veralda Investment and Nordea.

Corvex, which is Kindred’s largest shareholder, has played an integral role in pushing for Kindred to pursue a sale.

After a successful campaign the fund received a seat on the board for one of its partners James H. Gemmel.

This came after arguing the business should look into a full sale of the business in May 2022.

“Given recent developments, we believe the Kindred board should immediately retain a leading, global financial adviser to evaluate strategic alternatives, including the potential value that could be achieved through a sale or business combination,” said Corvex in a statement at the time.

The Stockholm District Court has ruled in Kindred’s favour after the business was sued by Per Holknekt, who now must pay SEK2m (€177,366) in legal fees.

The Swedish fashion entrepreneur sued Kindred in July 2022, claiming its Unibet brand targeted him with aggressive marketing despite his gambling addiction.

Holknekt sought SEK10m in damages from the operator. This is after he said he spent SEK26m with the business over a 15-year period.

Following a trial, which began last month, the court ruled in favour of Kindred. As such, Holknekt has been ordered to pay SEK2m to cover Kindred’s legal costs.

The court based its verdict on the fact Holknekt’s contract was with Unibet, which is owned by a subsidiary called Trannel, not Kindred Group itself.

“It has not been shown that Kindred Group has made any unauthorised profit through Per Holknekt’s gambling,” said the judgement.

“Even if one were to consider that Per Holknekt’s publicly held information could mean that his gambling agreement with Unibet International Ltd/Trannel was invalid/unfair… the contract law cannot in itself lead to another company being judged obliged to ‘repay’ any amount to him.”

The court also said it was unclear whether Kindred as a parent company is covered on Swedish business law as it is a foreign Malta-registered company.

Operators facing increased liability

The extent to which gambling operators face legal liability for their actions has become an important topic in recent years.

This ruling follows on from a December decision by the Swedish Patent and Market Court of Appeal, which held Kindred competitor Betsson liable for historic RG failures.

The case, which has now been appealed to the Supreme Court, saw the business ordered to pay SEK5.8m to a former VIP scheme member diagnosed with gambling addiction.

The case’s precedent led to Betsson’s stock crashing 8.3% in the initial aftermath of the ruling. The plaintiff’s lawyers were quoted speculating in the press that Betsson could ultimately be on the hook for hundreds of millions of kroner.

More broadly, many operators are facing legal judgements challenging revenue earned through European grey market activities.

Operators, including the likes of 888, have claimed their operations are still covered under European free movement of services rules despite the rise of locally regulated markets.

Enteractive, the leader in player conversion and reactivation services, has been engaged by Bethard, the leading Swedish operator, to complement their existing internal CRM services with Enteractive’s bespoke conversion and reactivation services to win back active players from lapsed accounts across their .se and .com brands.

The SGA-regulated Swedish powerhouse begins campaigns with Enteractive focused on both conversion of registered non-funded segments as well as the reactivation of lapsed player accounts, and sees Enteractive’s personalised approach to player outreach as the key to optimising revenue generation from these inactive segments of their player base.

Enteractive is the industry leader in player activation with more than 15 years experience, and is recognised as one of the top revenue generators globally for the online gambling sector.

Enteractive’s proprietary (Re)Activation Cloud technology platform allows a fast and seamless integration of selected player databases, with native-speaking sales agents able to engage with players in each market with real-human one-to-one outreach by phone.

This personalised approach to CRM is a proven way to re-engage players from churned segments, with responsible gambling best practices included as a standard feature.

Frank Heinanen, managing director at Bethard, commented: “In order to maximise revenue, Bethard has partnered with Enteractive to re-engage audience segments which we’ve found respond better to the more personal approach offered by a two-way phone conversation.

“To optimise the Lifetime Player Value (LPV) for every segment of our player base, Enteractive will concentrate on those particular audience groups we’ve identified as being more receptive to such direct and one-on-one interaction.”

John Foster, head of B2B sales at Enteractive, added: “We’re thrilled to collaborate with Bethard, whose sports betting and iGaming brands are well-established across their markets.

“Bethard recognizes the overlooked possibilities within inactive player accounts, and Enteractive possesses the perfect combination of technology and reactivation specialists to substantially boost active player revenues.”

With native speaking call agents supporting iGaming brands across the globe, Enteractive converts more than 16,000 players per month for a variety of leading operators.

Sweden’s licensed operators have again expressed concerns about payment providers serving unregulated operators within the country. 

In September 2023, operators claimed that Finshark, a financial services company, facilitated money transfers between Swedish consumers and gambling operators without a Swedish licence.

Some licensed operators called on the Swedish Gambling Authority (SGA) to conduct an investigation, citing similarities to a past directive that led Zimpler to discontinue a similar service.


Four months later, the industry asserts that the situation not only persists, but has worsened, with the alleged addition of a new pay-and-play feature. 

At the centre of the allegation are casino websites owned by Infiniza Ltd, a Maltese company in possession of an MGA licence since 2018. 

Screenshots obtained by NEXT.io reveal that players can sign in with a Swedish mobile number from Sweden and deposit funds using the Swedish identity verification system BankID with various Swedish banks, including Swedbank, Nordea and Handelsbanken.

The recipient of the deposit is Krofort, which is described on its website as an instant payment provider; however, there is no licence information displayed.

Industry sources who spoke to NEXT.io allege that Infiniza is the only operator with online casino brands linked with Finshark and Krofort, which gives them a competitive advantage over regulated operators.

Last year, licensed operators highlighted the advantage gained by grey-market operators who, much like their regulated rivals, can access fast payment services.

They stressed that this advantage is especially significant because Swedish customers anticipate quick withdrawals, raising concerns about why the SGA has not taken any action.

NEXT.io has contacted the SGA and Infinizia for comment.

Payment blocking

On 1 March 2023, the SGA launched a new B2B licensing regime to clamp down on B2B suppliers who provide their products to unlicensed operators which target consumers in Sweden without being bound by the regulatory framework.

While payment provision does not fall under this regime, the regulator has been granted enhanced payment blocking powers.

Shortly after, in July 2023, the SGA directed Zimpler to cease providing payment solutions using BankID to unlicensed operators. 

While Zimpler terminated its relationships with EU-licensed gaming companies without a Swedish licence, it also opted to appeal the decision “as it affects Zimpler and raises legal issues that are crucial to clarify, not only for Zimpler but for the entire industry.”

Two of Sweden’s three land-based casinos are at risk of permanent closure, according to a report in Swedish newspaper Göteborgs-Posten.

The Svenska Spel-operated Casino Cosmopol venues in Malmö and Gothenburg are currently at risk, according to the report, and could see the brand’s Stockholm venue become Sweden’s only remaining land-based casino.

According to the report, a decision on the future of the two casinos is set to be made at an extraordinary board meeting tomorrow (24 January).

The information was provided to Göteborgs-Posten by federal lawyer at Sweden’s Hotel and Restaurant Union, and contract manager for Casino Cosmopol, Eva-Lena Ramberg.

Employees are now expected to be told of the upcoming decision and trade unions called into negotiations on Thursday 25 January, according to Ramberg.

“There is still a certain possibility of influence and in the best of worlds our employee representatives can explain the importance of doing something other than liquidating,” she said.

“It is not the only way out of this bad economic situation.”

Around 120 employees would be impacted by the closure in Gothenburg, with a further 105 potentially facing job losses in Malmö.

Casinos closed three days per week

In September last year, it was announced that all three Casino Cosmopol venues in Sweden would remain closed on Sundays, Mondays and Tuesdays following increased competition from the online gambling sector.

“The trend for guests’ visits is towards them mainly wanting to come to us in connection with the weekend,” said Lotta Örtnäs, press manager at Casino Cosmopol operator Svenska Spel, at the time.

“We therefore focus on being open when our guests choose to come Wednesday to Saturday.”

The change came following sustained drops in Casino Cosmopol revenue year-on-year, which saw Svenska Spel’s land-based NGR fall 13.3% to SEK248m in Q2 2023 and 11.5% to SEK247m in Q3.

In addition to increased competition from online operators, Svenska Spel previously said its land-based revenue had fallen following “our strengthened measures at work with duty of care and against money laundering.”

Stakelogic, the in-demand premium casino content provider, has strengthened its position in the Swedish market through a new partnership with the popular Swedish operator ATG.

ATG will gain full access to Stakelogic’s portfolio of innovative and exciting online slot titles per the new deal.

Players at ATG will now be able to enhance their online casino experience by choosing from a wealth of modern and classic online slot titles.

Stakelogic titles are defined by innovation, with unique bonus features and engaging gameplay being the developer’s trademarks.

Recent hits for Stakelogic that ATG players will now have access to include games like Rooster Mobs, Wild Wild Bass 3, the latest title in the company’s popular Wild Wild Bass series and Wild Hogs.

Stakelogic also prides itself on its unique range of classic online slot games. These titles mix old-school designs and symbols with modern gameplay mechanics and bonuses.

Players can get a hit of nostalgia through the 7s, Bar Bells, and fruit symbols on the reels while also triggering exciting free spins and other bonuses.

The developer is always looking to change the game with bonuses, and this is apparent through the recent launch of the industry-first Super Wheel ™, which combines slot action with live casino.

This optional side-bet feature can be triggered on any spin, with players being whisked to a live casino setting where they can spin a money wheel to win big prizes and trigger additional bonuses within the game.

Neil Tanti, sales manager at Stakelogic, said “The Swedish market is a key target of ours, and by working with established developers like ATG, we can further cement our position as one of the must-have developers in the region.

“Players in Sweden demand the best from their online casino content, and we believe our unique brand of online slot action provides them with exactly that.“

Christian Erlandsson, head of sports and casino at ATG, said “Stakelogic is an exciting supplier of casino games and we are very happy to be able to add their games.

“They make an excellent addition to our ever-expanding slot collection and help us further cement our position as one of the best online casinos in Sweden”.

The Swedish online gambling trade association BOS has received significant backing in its opposition to the government’s proposed tax hike.

Last week, BOS strongly opposed the government’s plan to raise taxes from 18% to 22% of GGR for licensed gambling companies.

BOS’ argument centred on the government’s oversight of market factors, predicting that hiking the tax rate for licensed operators would reduce Sweden’s channelisation rate.

This stance gained support from major players like Kindred, Betsson, LeoVegas, and 888, which all expressed similar concerns.

Even beyond the gambling industry, groups like the Swedish Media Publishers’ Association and the Swedish Professional Football Association criticised the proposed tax increase.

The full list can be accessed here.

The primary focus of these objections revolved around the potential negative impacts on the channelisation rate and the resulting growth of the black market.

Industry heavyweights echo concerns

However, Kindred for instance also highlighted broader effects on consumer protection, media, and sports funding due to the proposal’s oversight.

The operator also highlighted that by increasing the channelisation rate to the widely accepted goal of 90% from the current 77%, the state’s tax revenue could rise by about SEK519m, matching the proposed increase.

Meanwhile, 888 stressed the pivotal role of regulation and taxation in determining a market’s success.

“Both of these elements may easily distort competition and consequently this would result in having less operators investing in markets that have strict regulatory limitations and higher tax rates,” the operator said.

888 added that higher tax rates often limit operators, catering to a narrow consumer base, while lower tax rates “give operators the flexibility to grow their player base, and consequently create broader benefits to the industry and its consumers.”

No measures to combat the black market

LeoVegas stressed that neither the government nor the Swedish Gaming Authority has introduced any measures or proposals to counter a downward trend in channelisation figures and combat the black market.

The operator warned that increasing the excise tax rate would further disadvantage licensed Swedish gambling companies.

Moreover, LeoVegas noted that the licensed gambling industry in Sweden has “not yet stabilised after five years of functioning under a regulated regime.”

“With this in mind, a tax increase starting as of next year, will most likely have serious negative repercussions on an already vulnerable market,” the operator said.

Betsson, in its objection, disputed comparisons to Denmark, referencing the correlation between tax increases and declining channelisation rates, as confirmed by Danish tax minister Jeppe Bruus.

Betsson proposed prioritising resources for Spelinspektionen to reduce unlicensed gambling before reconsidering a tax increase.

“When these measures yield results, a new dialogue/investigation on the degree of channelisation can be resumed and reviewed whether there would be room for a tax increase and what such a tax increase would lead to,” Betsson said.

Strains on sports and media partnerships

The Swedish Professional Football Leagues Association expressed concerns about the potential negative impacts of a higher gambling tax on Swedish sports.

The organisation anticipated difficulties in establishing partnerships with gambling companies, leading to a significant decrease in income from sponsorships, directly affecting clubs’ financial stability.

“Football cannot live solely on the commitment and voluntary efforts of players, managers and supporters – money is also needed,” the association said.

Similarly, the Swedish Media Publishers’ Association cautioned that the increased costs resulting from the tax hike might prompt licensed gambling companies to cut back on their marketing within traditional media channels.

This reduction, the organisation explained, might significantly lower advertising revenue from gambling ads, thereby hampering media companies’ capacity to maintain high-quality journalism.

Swedish online gambling trade association BOS has warned against a government proposal to increase the tax rate on licensed gambling companies from 18% of GGR to 22%.

In September, Sweden’s government proposed an increase in the gambling tax rate as part of its 2024 budget proposition, suggesting that the higher rate would still be compatible with its long-term aims for the country’s gambling market.

Those aims include a high channelisation rate in the legal market of over 90%, as well as a high level of consumer protection and strong tax revenue generation.

The government suggested the tax hike could bring in as much as SEK540m annually in additional tax revenue, and therefore proposed introducing the new rate from July 2024.

Unrealistic expectations

In response, BOS suggested the government had failed to properly consider the ramifications of the increased tax rate.

The government’s expectation for the increased rate to generate more than SEK500m annually in additional tax revenue did not account for several key factors, the association said.

First, it suggested there would be an increased cost to the government as a result of higher rates of problem gambling, caused by a greater number of customers opting to use unregulated operators instead of staying within the regulated market.

There is also “a complete lack of calculations on the extent of lost tax revenue due to the fact that the tax increase results in reduced channelisation, as well as in general reduced gambling on the licensed market because the price of gambling products is raised,” it said.

Further, the increased tax revenue “has to come from somewhere,” and BOS suggested the money would be taken away from advertising revenue in traditional media and sports sponsorships.

Channelisation the key aim

According to BOS, the government’s primary concern regarding the gambling market should be to achieve a high channelisation rate in line with its previously stated target of over 90%.

Since first introducing that target, BOS suggested, the government has distanced itself from the goal and softened the language used around it, opting instead to refer to the figure as an “expectation, assessment or forecast”.

BOS “strongly recommends” that the government reconsider the 90% target as a concrete objective, as any attempt to distance itself from the goal “harms the government and the legitimacy of the licensing system, and what is worse harms Sweden’s gambling consumers.”

The association suggested that a high rate of channelisation should be the government’s key objective with regards to the gambling market, as it will allow it to reach all of its other goals in the sector.

Those goals include strong consumer protection, the minimisation of harmful gambling, keeping crime out of gambling, generating strong tax revenue, creating strong market conditions and maintaining a high level of legitimacy for Sweden’s licensing system.

An increase in the tax rate would undermine all of those goals at once, BOS argued.

Head in the sand

In its proposal to increase the tax rate, the Swedish government suggested that the original 18% tax rate introduced in the licensed market had been introduced at a lower level “for precautionary reasons”.

Since then, the government suggested, “the gambling market has stabilised and channelisation has increased significantly. In addition, measures have been taken to exclude unlicensed gambling from the Swedish market.”

BOS said this description of the current situation in Sweden’s gambling market was one in which “the government is quite alone.”

Indeed, BOS added, the claim is based only on data gathered up until 2021, and “it is unfortunate that the state has not produced more recent data than this” and that it “has not taken on board new data presented by actors other than the state.”

A report recently produced by BOS, for example, showed that far from its stated target of 90%, the channelisation rate in Sweden was in fact around 77% up until March 2023.

“It is a channelisation rate that testifies that the Swedish licensed market is in a very serious situation,” BOS added.

That report also showed that in the online casino vertical specifically, the figures were even more stark, with a channelisation rate of just 72%.

“That in such a situation there is no room for measures that further damage channelisation – which a tax increase on gambling does – should be obvious,” BOS added.

BOS recommendation

In its own recommendation to the government, BOS pointed to a previous report from consulting firm Copenhagen Economics, which suggested an optimal tax rate for Sweden’s gambling market of 15-20%.

Any tax rate above 20% would lead to decreased channelisation and a resultant decrease in overall tax revenue, it suggested.

“There is no reason to believe that the state can now, compared to the years before the Swedish re-regulation of the gambling market, be able to deviate from the presented tax range without damaging the licensed market. 

“On the contrary, today’s critically low channelisation bears witness that the tax in this sensitive situation should under no circumstances be increased. 

“Instead, the government and the Riksdag should urgently devote themselves to reforms that strengthen channelisation,” BOS concluded.

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