March 31, 2017

On 31 March 2017, the Swedish government published its long-awaited report on the “re-regulation” of online gambling in Sweden. The report is considered by industry stakeholders to be a fundamental component of the Swedish government’s investigation into the opening of the online gambling market. As expected, recommendations include a proposal for the introduction of a licensing regime for online gambling in Sweden that will allow private operators to obtain a local licence. Sweden will become a “regulated market” at last.

Highlights of the report include the following proposals:

• The establishment of a licensing regime for the gambling market with licences obtainable by private operators, Svenska Spel and ATG to provide online casino, betting, poker and bingo products.
• Svenska Spel, the state-owned monopoly provider, to be split into two divisions; the first will retain exclusive rights for land-based casinos and gambling on token gaming machines and the second division willshare exclusive rights with the public interest associations for online and land-based lotteries. It will also ring-fence a  commercial arm which will apply for online licences. This commercial arm is proposed to be sold.  
• ATG, the Swedish Horse Racing Totalisator Board, will no longer have a monopoly right to offer horse race betting and will instead obtain the necessary permissions to offer such services by way of the conventional licensing regime.
• The introduction of a sanctions system to control the activities of licence holders and to sanction those unlicensed. Proposals include the establishment of a criminal sanction for payment transfers processed for unlicensed operators, and a less onerous requirement than IP blocking for ISPs to display a warning message to players attempting to play on unlicensed websites.
• A tax rate of 18 percent on gambling in the competitive sector, calculated on net gambling revenue.
• Marketing activities to be regulated and socially responsible gambling to be promoted.

The Swedish government has been under pressure to update its online gambling regulations for some time. The commencement of infringement proceedings by the European Commission in 2014 were expected to mobilise the government; however, progress on the reforms has been relatively slow-moving since initial remarks for the introduction of a licensing system published in a Swedish Ministry of Finance report in 2015.

Implementation of the licensing regime will not likely emerge until 2019, but the findings of the report will likely be welcome news to interested stakeholders who maintain a close watching brief on the extensive growth of online gambling market in Sweden.

Although non-binding, the report will now function as the key driver behind draft legislation which is expected to be introduced in the Swedish parliament later this year.

The report can be found here in Swedish. A summary is available in English on pages 45-71.