Sweden Allows Licensed International Online Gambling Sites
The Swedish Government proposed a new licensing and tax for its gambling sector. The change is intended to better regulate the activities of remote gambling firms which are providing services to Swedish residents from other jurisdictions.
The new policies focus on licensing and taxation, including an 18% tax on all remote gambling. The key part of the new law would be a partial end to the longstanding monopoly held by Svenska Spel, the state-run gaming operator. Instead, the Swedish government would open the door to licensing a select number of international online gaming operators.
Sweden is a hub of the online gambling industry. Cherry, the Swedish land-based gaming company, owns the British bookmaker site, Betsson, and the online gaming software company, Net Entertainment (NetEnt). In fact, Swedish game designers staff a bevy of startup companies based in Sweden, including Play’n Go, ELK Studios, Thunderkick, and NYX Gaming Group.
Those companies supply games to many of the online gambling sites which would operate in Sweden, but have been banned over the past couple of decades.
2018 Swedish Online Gambling Law
The proposed change, which is set to take full effect on January 1, 2019, would require online gambling firms to apply for a license in order to provide services in Sweden. Companies would have to uphold Swedish consumer protections, along with protections for gamblers such as self-exclusion provisions and helplines for problem gamblers.
Those selected for a license would be responsible for 18 percent tax on gross gaming revenue.
The goal with the proposed legislation is to shut out any unlicensed remote gambling firms currently operating in the Swedish market. While those sites still would operate with impunity, Swedish players would migrate from those sites to the more trustworthy licensed online casinos, sportsbooks, and poker sites.
Swedish Gambling Laws of the 1930s
The new law would help to enhance the existing regulatory framework which have been in place for generations. Many Swedish gambling laws date back to the 1930s, when the government began to regulate lottery betting and sports betting.
In 1934, the private bookmaker Tipstjanst began operating a sportsbook legally. In 1939, the Swedish government took over Penninglotteriet, which had existed in one form or another since 1773.
While the new laws would keep the state-run monopolies in place, those operators would have to compete with 21st century online gaming operators. The Swedish Gambling Authority, Lotteriinspektionen, will issue gaming licenses, which will be valid for five years.
Regulating an Already-Existing Market
Foreign operators have targeted Swedish online sports bettors, poker players, and casino gamblers for two decades. Svenska Spel, a state-run operator, is currently the only gambling operator allowed to offer online gambling services in the country.
Despite the ban, Sweden’s unregulated online gambling market generated a revenue of SEK4.045 billion, which made up more than a quarter of the country’s whole gambling sector over the first half of 2017. Sweden’s entire gambling market produced more than SEK16.557 billion, so lawmakers hope to increase their tax revenues with legalization, licensing, and taxation.
With the new legislation, Lotteriinspektionen will be authorized to request local Internet service providers to display a warning message to their users, if those gamblers have accessed unregulated gambling websites. Lawmakers hope this will deter Swedish gamblers from using unlicensed sites, though the new system would be a DNS block and not an IP block – giving gamblers the option to continue playing at the unregulated site. The system is identical to one Norway’s legislature is discussing.
If that does not work, later legislation may require all payment service providers to block any transactions done between Swedish residents and unlicensed operators. In Russia, the United States, and Australia, operators have found more success in targeting payment processors than the actual online casinos, sportsbooks, and poker rooms themselves.
Changes to Bonus Promotions
The proposed law includes restrictions on the way bonuses are distributed to Swedish players. There will only be one-off bonuses (no-deposit bonuses) for players upon registering a new account with a licensed operator. Previous drafted versions of the proposal would have allowed all bonuses.
Sweden’s drafted proposal also attempts to better regulate problem gambling and compulsive gambling. Under the new legislation, all players would be required to set deposit limits on operator’s sites.
International gaming operators would undergo a licensing process set by the Swedish Government. After the conclusion of a three-month deadlock in the Swedish parliament — set to allow time for EU authorities to review the gaming license process in other EU countries – lawmakers finally agreed upon the new plan. Swedish officials said they would accept license applications from operators perhaps by mid-2018.