The Final Countdown – will Sweden adapt a more viable gambling law?

The Final Countdown – will Sweden adapt a more viable gambling law?

Guest post by Maria McDonald of Nordic Gambling

On 31 March 2017, a Swedish official inquiry regarding new gambling legislation was submitted. The inquiry has been unusually well received, and the majority of stakeholders have welcomed the much-needed changes to the market. And indeed, on paper, the suggestions do look promising.

Basic Licence Conditions

Based on the Danish model, the system will allow foreign gambling companies, Svenska Spel (gambling monopoly) and ATG (the Swedish horse racing monopoly) to seek licences for the competitive section of the market. The products included are online casino, online poker, online bingo as well as online and land-based betting. B2B-operators and certain other suppliers will also be obliged to hold licences.

No limitation on the total number of licences has been proposed, and there will not be any application window outside of which new licence applications cannot be submitted.

The proposed tax rate applicable to the competitive sector is 18 percent of the gross gambling revenue.

Remaining Concerns

Over the summer, the inquiry has been subject to a public consultation. In their responses, online operators generally support the draft law and recommend that the law is kept as is so that it can be implemented on time. However, they do bring forward two major concerns:

• The inquiry has suggested a division of Svenska Spel so that there is one competitive company and one monopoly company with a joint holding company. Even if there was to be a clear division of customer databases, trademarks, websites, technical systems, etc., the point of a holding company is to share resources, and the risk of abuse is imminent.

• The draft is by necessity a framework law. However, no secondary legislation has been published or included in the consultancy, and many important details will be added through such regulations. With the period for licence applications quickly approaching, operators still do not know in detail what they will have to adhere to and what the costs will be.

Stakeholders such as public authorities, sports organisations, the current state monopolies and not-for-profit organisations advocate a lot more changes. However, if implemented, it can be argued that the channelling of customers into the new market may suffer. The main suggestions/issues brought up are:

• Further classification of games depending on the risk (of addiction) involved and further regulations to restrict marketing and the use of bonuses.

• Introduction of restrictions on return to players (RTP) with the motivation that it would help combat match-fixing, money-laundering and gambling addiction.

• Restrictions with regards to spot betting (e.g. live betting on next yellow card, corner, etc.) and betting on lower leagues because of the risk of match fixing and increased problem gambling.

• Online bingo to be excluded from the competitive market.

Important to note is that the new regulation does not automatically render all inconsistency with EU law null and void. In particular, different taxation levels depending on the type of games is debatable. The inquiry itself notes the issue and recommends a pre-notification to the EU Commission. However, so far, no such action has been taken by Sweden.

Timeline

The target date for the licence application process is July 2018, and the first licences are expected to be issued and be valid from 1 January 2019, albeit mid-2019 now may be more feasible. However, exactly how and when the licensing system is put in place remains to be seen.

It does nonetheless seem as if Sweden has taken its first steps towards a more modern and viable gambling legislation. Nordic Gambling is happy to provide you with more details and assist you in the new market.