Why Extended Restrictions Will Kill Sweden's Gambling Industry

Sweden’s Ministry of Finance has proposed an extension of the country’s strict gambling policies based on the feedback from the health sector.

Ardalan Shekarabi, the Swedish Minister of Social Insurance, said:

“We see that the spread of Covid-19 is still high in Sweden, the current situation entails great risks for consumers in the gaming market. We, therefore, need to act to reduce the risks for the most vulnerable consumers.”

This proposal will see the continued limitations on deposits (SEK 5000 per month), ongoing player bonus limitations (no more than SEK 100) and limits on the number of hours a player can gamble at an online casino per day extended to November 2021.

While this might seem like a good idea in isolation, the decision does not consider two key market factors for the gambling community, those being: increased digitalisation and the ease of access to non-regulated gambling sites.

 BOS Pushes Back

When the initial round of restrictions was first proposed the Swedish Trade Association for Online Gambling (BOS) raised their concerns regarding the negative impact they would have on channelisation.

Now with the imminent risk of these restrictions being extended to November 2021, at the very least, they once again find themselves at odds with the government.

Referencing a report by the Swedish Agency for Public Management Gustaf Hoffstedt, BOS secretary-general, said:

“The government seems unaware that their own expert authority, the Swedish Agency for Public Management, stated that the leakage from the Swedish gaming market to the unregulated gaming market is alarmingly high. The leakage for online casinos is particularly high, whereas much as every fourth gaming krona is played outside the Swedish licensed market.”

One of Sweden’s ongoing problems has been reaching its 90% channelisation goal, a 2019 study showed online gambling channelisation to be as low as 72%. By implementing decisions that severely limit the freedoms of players to gamble – even online where the pandemic cannot touch them – they are artificially inflating the need for Swedes to gamble illegally.

 Operators Add Their Voice

Adding their voice to the rising chorus opposing the new November 2021 extension is the Kindred Group. As a company which is publicly listed on the Stockholm Stock Exchange these decisions impact both their player base and their investors.

Henrik Tjärnström, Kindred Group CEO, said:

“What we can see is lower channelisation and increased activity at unlicensed operators with zero consumer protection. That is a step in the wrong direction, and it is not the gambling policy decided by the Swedish Parliament.”

They have gone on record berating the government for being alarmists. While there are medical facts that cannot be ignored, to date no local or international body has been able to draw clear parallels between increased time online and problem gambling in Sweden.

In addition to leaning into an abstinence-as-protection mindset, they also feel the government has made no effort to support the more than 100 licensed operators in the region by encouraging players to choose licensed gambling sites over their unlicensed counterparts.

Should these seemingly unmerited restrictions continue to November, and potentially beyond, the Swedish gambling market could reach a tipping point where the player community, and even operators, no longer see the value of licensing.