Swedish online trade group calls for Gambling Act “loopholes” to be closed

BOS has urged the Ministry of Finance to close loopholes that allow unlicensed gambling operators to target Swedes.

Sweden.- The online gambling industry association Branschföreningen för Onlinespel (BOS) has urged Sweden’s government to close what it describes as loopholes in the country’s Gambling Act. The call comes after a Swedish court quashed an injunction issued by the national gambling regulator Spelinspektionen against the payment provider Zimpler.

The Court of Appeal said that Sweden’s gambling regulations lacked “concreteness” in the definition of illegal gambling offerings because the wording states that operators can only be deemed to be targeting Swedish players if they use the Swedish language or list the Swedish Krona as an accepted currency. 

According to BOS, this wording in Chapters 18 and 19 of the Gambling Act of 2018 means that operators can use English and any currency other than the Krona to avoid any action for accepting Swedish players. It said this goes against the regulatory intent of the legislation.

Chapter 18 (Section 26) allows authorities to block payment transactions if a website is targeting Swedish consumers by using the Swedish language or currency. Chapter 19, relating to criminal liabilities and the prevention of illegal gambling, states the same condition. BOS says this fails to recognise the fact that operators may still explicitly target Swedish players through their choices of advertising platforms and affiliates. 

It said: “The decisive factor is whether the gaming site has text in Swedish or offers deposits and winnings in the Swedish currency, and that this must be determined by an overall assessment on a case-by-case basis.”

Gustaf Hoffstedt, BOS’s secretary general, said: “Unlicensed gambling should be eliminated in Sweden. It is completely inadequate that around a quarter of all gambling is unlicensed, not least due to the total absence of consumer protection on the black gambling market. If we are to succeed in eliminating this part of the gambling market, the Gambling Act must be amended, and all unlicensed gambling must be criminalised.

“It is not impossible to achieve high channelisation, and Sweden does not need to look further than Denmark to find examples of this.”

He said there were “two collaborative ways to achieve high channelisation”. One would be to give licensed operators few restrictions so consumers have no reason to choose an unlicensed alternative. However, Hoffstedt recognised that licensing was intended to reduce excessive gambling. In which case, the main method should be to “make access to unlicensed gambling so difficult that gambling consumers do not have the energy to make the effort to play at unlicensed gambling companies”.

One issue for Sweden-licensed operators is the tax rate. Hasse Lord Skarplöth, chief executive of AB Trav och Galopp (ATG), has reiterated his call for a review of Sweden’s rise in gambling tax after the horse racing betting operator published flattish results. Skarplöth said that revenue had been hit by the general economic downturn, inflation and higher interest rates, while the rise in Swedish gambling tax from 18 to 22 per cent from July hit the operator’s profit.

Skarplöth has previously described the tax hike as a “horse tax” because of its impact on the profits that ATG generates to invest in the sector. He has again called for the government to consider an alternative framework that would charge online casino operators more and avoid hitting the horse racing sector. However, the government is unlikely to want to pass all of the hike to online casino operators for the risk that channelisation suffers further.