European gambling market perspectives: gambling in Sweden (part2)

Sweden gambling monopoly

The Swedish gambling industry has made a considerable growth in the past 2 year creating one of the most profitable European gambling markets

Beside the gambling monopolies in Europe to which GamingZion has written in some details since the past months, there are countries whose gambling environment is characterized by a licensing system in which however one or two companies have some advantages over the others. The Swedish market is a perfect illustration of this situation. Although in the last couple of years the private sector is noting high development, the legal regulations are still giving advantage to the state owned companies. Soon, a debate is to be started in Sweden on the changes of the gambling laws in the country, especially in the online gambling sector. The main question is, how the role of the state owned companies, holding a monopoly in separate gambling spheres will be framed in the future gambling legislative?

The legal regulation behind the Swedish market: in protection of an oligopoly

The Gambling market in Sweden is regulated by the Lottery Act of 1994 as well as by the Casino Act of 1999. According to this legislation, as online gambling sites in Sweden note, licenses are issued by the governmental authorities, most of them being owned by the state-owned operator, Svenska Spel, which owns more than 51 % of all gambling facilities in the country. If we add to the domination of Svenska Spel the privileged position of the Swedish Horse Racing
Totalisator Board (ATG), then we can clearly conclude that gambling in Sweden is governed by an oligopoly. Namely, if we sum up the percentages of the market coverage in terms of gambling facilities than we can conclude that almost 85 % of the market is owned by these two companies while only 11% belongs other licensed operators, and a small percentage of 4 % falling on non-licensed operators in the country

• New gambling act to be expected in Sweden in 2018

• Will Sweden continue the “patriotic” game of protecting state owned gambling companies?

• Over 85 % of the gambling offer in Sweden comes from state owned companies

The Swedish National Audit Office issued a report back in 2012 which aimed at evaluating degrees to which Swedish gambling policies achieved their goals in regard of the issuing licenses that cover the whole Swedish territory. One of the findings stressed in this report was that the Swedish gambling policies did not comply with EU requirements. Namely the national monopoly was not effective in solving the problems in regard of the gambling. Two issues were especially emphasized. First of all, the monopoly did not provide sufficient means for customer protection.

The brute fact that Svenska Spel is owned by the government does not imply that they will introduce per se social protection for the costumers in their marketing propaganda. On the contrary, their privileged position was used for building up the budget, leaving the costumer-care as a secondary concern. The second problem that sprang in this regard was the problem of justifying the monopoly. Certainly, as online gambling sites in EU note, the Swedish legislative could not play on the card of protection of costumers, so they had to appeal to a more broader developmental aims which bring advantages to the cultural sphere in the country. However, possible changes are announced for discussion in 2017 and are expected not only to move the country beyond the gambling oligopoly but also to bring high economic performances in future.

Future plans for gambling development in Sweden

Gambling experts claim that the new gambling legislation in Sweden should have into account three points. First of all, no matter whether there is a monopoly in the gambling services section or not a strong collaboration must be developed among the Swedish IT companies dealing with gaming platforms and the service providers. Second, in case the monopoly of Svenska Spel is to be ended, Sweden should appropriate the Danish model of regulation and only require licenses for gambling operators and not for their subcontractors.

Lastly, as gambling news report, the political interest involved in the gambling policies should be oriented towards the long term goals of the Swedish market, and not towards gaining political points. What the economic liberalization of the market will bring is something that should always be counted for in a long term, especially in relation to the possibilities for development of other sectors in the country such as the cultural or the sports one. How much of these aspects will be considered in the debate and the drafting of the new law is something we will soon find out with the beginning of the debate on the new Swedish gambling legislative.

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