Could B2B Licences Limit Illegal Gambling in Sweden?

As they promised, Swedish lawmakers continue to fine-tune online gambling regulations and the current points on their agenda include B2B licensing and related topics. As one of the youngest regulated markets in the industry, Swedish platforms and players have experienced a good deal of regulatory uncertainty.

The new licensing laws will come into effect on 1 March 2023 while the memorandum with proposals is already in consultation. Amended rules include a mandatory licensing process for software providers who supply content services to Swedish gambling platforms.

When they announced the proposals to update regulations for iGaming, Minister Ardalan Shekarabi mentioned the end goal is to weed out unlicensed providers and black-market gambling.

 Accountable Providers

Proposals for introducing business-to-business supplier licences surfaced during a press conference held in January. Minister Ardalan Shekarabi from the Department of Social Security announced the mandatory licence for software providers and further measures aiming at safer gambling for Swedes.

A consultation for the new licensing system remains open until 9 May 2022, while they examine this proposal. The memorandum includes updated licensing fee structures to define the costs of B2B licence applications, but also to amend renewal fees for B2C operators. Licensed software providers are obligated to have a representative within Sweden if their headquarters aren’t in the European Economic Area.

Further proposals include that software providers must store data for as long as it would take the regulator to administer their supervisory duties. The proposal also states that the regulator should charge licensees for any supervision exercised by the authority.

 Related and Increased Fees

When commenting on the renewal fees for B2C licences doubling in costs, the memorandum details that current fees undervalue the efforts of Spelinspektionen with the process of renewal. The proposed increase from SEK300,00 to SEK600,00 takes into consideration the time and resources used during licence renewal. The government commented:

“The current fee for renewing a licence for both commercial online gaming and betting does not take into account the Swedish Gaming Inspectorate’s actual costs for such an application. In principle, the same processing measures need to be taken in the case of a renewal of a licence as in the case of a new application.”

The ministry argues that beyond the standard administrative processes, Spelinspektionen must carry out all original checks, including the accountability of current staff. Therefore, the government pushes for a marginal difference in cost from a new application to a renewal. According to the government, these charges are low compared to the Swedish online market and will amount to a mere 0.03% of the turnover for the period the licence relates to.

Software providers will pay a licensing application fee of SEK120,000 once the proposal passes into effect with a SEK30,000 charge attached to application changes.

 Can Compulsory B2B Licence Curb Illegal Gambling?

Sweden’s government expects to issue approximately 70 software licences once they are ready to launch. How this will affect the options available to Swedish punters is unclear. Gaming providers have time to ensure they get all their ducks in a row, but the government must clarify the details for a successful application first.

Studies concluded that strict online gambling laws on financial checks, deposit limits, and provider options for players have a massive impact on illegal gambling. B2B licences may cause a major cut in gaming options for Swedish gamblers, and dissatisfied users may turn to black market operators for better options.