Eskil Kvarnström, CEO of Leadstar Media talked to Focus Gaming News about the Swedish gambling affiliate situation.
Sweden.- Up until 2019 Sweden had a monopolised gambling market, where only state-owned Svenska Spel and state-controlled ATG were allowed to offer gambling services. This however did not prohibit players from using internationally licensed bookmakers to wager. Despite being a relatively small nation with just north of 10 million people, it has had a big presence on the global iGaming scene for decades.
The first online bookmaker started by a Sweden was Unibet in 1997 and since then many have followed. Forced to set up operations abroad, Malta has quickly become Europe’s iGaming hub where many of the biggest companies we know today reside. In the mid to late 2000’s a wave of Swedish-born affiliate companies such as Catena Media, Leadstar Media and Raketech began to operate. One of those, namely Leadstar Media, didn’t make the move to Malta and are still headquartered in Stockholm today.
Why did you set up offices in Stockholm? Was Malta ever an option?
We did discuss Malta for a while but ultimately decided on Stockholm instead. It comes down to a couple of things. Me and the other co-founders are from Sweden, with families and friends here. Also we were very focused on the long-term from the beginning and with the high employee turnover that can exist in Malta, it didn’t feel like the best option for us. We want to attract the right people and keep them within the company for many years, so Stockholm felt like a place where people would adapt and stay for longer.
You started with Swedish affiliate sites, is that still your main market?
The first site was Oddsbonusar.se which compares betting bonuses, quickly followed by Bookiesbonuses.com for the UK market. We are continuously expanding into new markets, but Sweden still remains one of our main markets. It is somewhat oversaturated, but our reputation and position as one of the biggest affiliates in Sweden is still valuable for us, even though the potential has decreased.
How would you describe the Swedish affiliate scene today compared to when you started?
Many things have changed, from competition to regulation, and we welcome both with open arms. The competition drives us to be better, the customers have so many options today so you have to be on top of everything and deliver the best experience if you want to be successful. The biggest change came with the new Gambling Act in 2019 and it felt like a lot of companies disappeared or shifted focus to other markets. The regulation is still a pretty new thing and might have some flaws, but in general it’s a positive for the industry.
We are continuously expanding into new markets, but Sweden still remains one of our main markets.Eskil Kvarnström, CEO of Leadstar Media.
What are the challenges in Sweden going forward?
The channelization of players to non-licensed operators is still higher than expected. According to the Swedish Gambling Authority, 95% of Swedes still don’t know how to check if an operator has a Swedish license. There will always be some channelisation, but affiliates, operators and the authorities all play a part in educating players and helping them choose the best option. Although our sites only promote partners that hold a license in Sweden, we created Bettingkollen.se which puts more emphasis on educating players about legal betting sites.
The Swedish gambling market turnover for 2019 reached 24.8 billion SEK (€2.2 billion), up approximately 1.4 billion SEK (€127 million) from the year before despite stricter regulations. The Swedish Gambling Authority explains this, in part, on their estimation being off before regulation.