“This is yet another repressive measure [from the government],”Hoffstedt tells iGB in response to the Gambling Act review (25 February). “What is even more important is liberalising the licensed market to make it more attractive to consumers.”
Gambling Act Review to close black market loophole
Sweden’s government announced a review of its Gambling Act on 20 February to tackle the growing threat of illegal gambling sites. The investigation will run until September and consider measures that could make it tougher for illegal sites to operate in Sweden.
It follows an open letter published by Hoffstedt and BOS on 16 February, which called for the government to close a loophole in gambling legislation. The loopholes enable illegal operators to target and engage players.
In the letter, Hoffstedt said under Sweden’s legal framework unlicensed operators are only prohibited from offering gambling when targeting consumers in Swedish and/or processing transactions in Sweden’s local currency SEK.
To work around this rule, many black-market providers operate and market their products in English, using euros as a currency.
The Gambling Act review aims to “effectively shut out unlicensed gambling” the Swedish government said in a separate letter to Hoffstedt, which asked for insight into the current gambling market.
Another repressive measure?
Hoffstedt has long called for a liberal approach to gambling regulations in Sweden, as he believes increased restrictions for licensed operators are helping fuel the black market’s growth.
The BOS chief believes the Gambling Act review will likely result in further restrictive measures for the legal market.
“The [previous] social democrat-led government, nor [the current] government has taken any initiative to make the licensed market more attractive to consumers,” Hoffstedt adds. “Therefore, my pessimistic view is that we will still struggle with channelisation in coming years.”
Although stakeholders have reported a slight incline in Sweden’s channelisation rate between 2023 and 2024, estimates are still way off the Swedish regulator’s target of a 90% rate when it launched the licensed market in 2019.
Both BOS and monopoly horseracing operator ATG have estimated the rate is around 77%. In its latest report covering Q3 2024, ATG said visitor traffic to unlicensed domains in Sweden had increased tenfold since 2019.
Hoffstedt said the regulator (Spelinspektionen) had recently revised down its recent channelisation estimate of 86% based on changes made in H2 Gambling Capital data.
Timeline for the Gambling Act review
Despite his concerns, Hoffstedt welcomes the government’s initiative to take action. He expects the full review and any change to legislation to come into force before the next general election in Sweden in September 2026.
“I expect the new legislation to be up and running during this mandate period that ends by the autumn of 2026,” he says.
The best-case scenario is changes to the legislation are enacted by New Year’s 2026 and that this government.
The Gambling Act review and any suggestions to change the legislation will have to go through a rigorous approval process and be put to the wider parliament to vote on.
“The investigator will present a report in September and after that a referral period will occur [during which] any stakeholder can respond to the investigator’s suggestions. After that the government can either dismiss, adjust or adopt the investigator’s suggestions. In this case, it’s very likely that the government will adopt the suggestion and then it goes through a constitutional review court to check that it doesn’t infringe upon the Swedish constitution,” Hoffstedt says of the timeline.
Then it will be up to parliament to vote on the suggestions and update the current legislation.
Original article: https://igamingbusiness.com/legal-compliance/sweden-gambling-act-review-channelisation-problem/
