Sweden will introduce stricter gambling measures in April 2024
By Shadrack Kairu
Stricter gambling regulations are coming to Sweden effective April 1, 2024, in a move that is seen as crucial to enhance consumer protections and fight gambling-related crime. The Swedish government (Regeringen) harmonized a series of gambling amendments into a single bill, which was later approved by the Riksdag, the country’s parliament.
Under the newly confirmed amendments, the government seeks to impose higher fees on gambling operators that violate the Anti-Money Laundering Act (AML). Additionally, it aims to provide legal online gambling companies with the right to access personal data relating to finance and health that players themselves have provided, with a view to combating gambling-related harm. The new regulatory framework means that tougher requirements are in the pipeline for online casinos regarding consumer protection and responsible gambling.
The Swedish Gambling Authority, Spelinspektionen, has welcomed these new government proposals saying it’s a step in the right direction.
Spelinspektionen Director General Camilla Rosenberg expressed satisfaction with the proposals, noting “We welcome the proposals in the referral that enable further measures to strengthen the regulation of the gaming market. “
“It is also gratifying that the government has now heeded the Gambling Authority’s proposal to raise the sanction ceiling for violations of the Money Laundering Act,” she added.
Consumer safety and new standards for Sweden’s gambling industry
A notable provision under the new revisions to the Swedish Gambling Act of 2018 includes the requirement for telemarketing sales of gambling services to be presented in writing to consumers. This means that gambling companies will now be required to obtain written approval from players before engaging in telephone sales of games. Any agreements not made in writing will be deemed invalid. The aim of this is to promote responsible gambling and ultimately protect consumers from excessive betting.
In addition, the proposed bill requires that providers of legal online casinos be granted the right to access personal financial and health data that the players themselves have provided. This will enable them to monitor and analyze players’ financial and health status in an effort to counteract excessive gambling. This is also intended to protect players from crimes associated with online gambling.
The new Swedish gambling law slated to take effect on 1 April 2024 also seeks to impose higher fines on gambling companies that breach the country’s Money Laundering Act. As it stands, the penalty fee for betting companies that contravene the Money Laundering Act is lower than for those that violate the Gambling Act.
Under the new law, the government plans to increase fines for AML violations to the same level as those for violating the Gambling Act. This, the government believes, is crucial for combating criminal activities that stem from gambling.
The Swedish Trade Association for Online Gambling, Branschföreningen för Onlinespel (BOS), welcomed the government proposals which would see higher penalties imposed on companies for money laundering violations. Responding to the proposal – which was first introduced by the Ministry of Finance, Finansdepartementet, in June – BOS said it approved the proposal because of the seriousness of the AML violation risk. The trade body, however, expressed its reservations about other proposals in the new law.
Increased tax on gambling winnings also on the cards
Meanwhile, Sweden’s parliament, the Riksdag, is in discussions about increasing the personal income tax on gambling winnings from 18% to 22%. If the parliament approves it, the amendments are poised to take effect starting July 1, 2024, and will see the government raise an additional SEK 540m (£39.4m) in gambling tax per year.
Sweden’s legal gambling landscape has evolved relatively steadily in the past few years. Unlike some jurisdictions that opt for swift and comprehensive reforms, potentially leading to increased illegal gambling activities, the Swedish government has embraced an evolutionary approach.
First, it established the Swedish Gambling Act on January 1, 2019, setting the rules of the game for gambling operators. Then in 2023, it implemented a raft of measures aimed at combating illegal operations, strengthening consumer protections, and improving customer care duties for online betting licensees.
More notably, on July 1, 2023, supplier licenses were enforced while new enforcement powers were handed to Spelinspektionen. And now, the government is eyeing increasing the gambling tax rate starting in July 2024.
But these amendments are coming at a time when the growth of Sweden’s regulated gambling market seems to have taken a slump, according to the latest financial report released by Spelinspektionen.
In Q2 of 2023, for example, licensed gambling operators generated a gross gaming revenue (GGR) of SEK 6.7bn (€562.8 million). This GCR was down over 1% compared to the SEK 6.77bn (€568.7 million) reported in Q2 2022. Furthermore, in Q3 2023, GGR decreased 0.6% year-over-year and plateaued versus the third quarter of 2022.
The report further reveals that by the end of Q3 of 2023, roughly 99,000 people had registered for the voluntary self-exclusion scheme through Spelinspektionen’s self-exclusion program Spelpaus.se. This marks a 4% increase compared to the previous quarter of the year.
How Swedish gambling operators are preparing for these changes
The newly proposed gambling measures have however been met with some backlash from the Swedish gambling operators, with Sweden’s Branschföreningen för Onlinespel (BOS) labelling the tax changes a “Christmas Gift” for offshore online casinos.
BOS, a prominent critic of the government’s management of the gambling sector, expressed serious concerns over the government’s decision to raise gambling taxes, deeming its timing particularly hostile for the regulated market. The association argued that raising gambling taxes will only drive players to turn to illicit operators in the black market.
In a press release, Gustaf Hoffstedt, BOS Secretary General, emphasized the impact this could have on the country’s regulated gambling market, stressing its ill timing. Voicing BOS’s rejection of the proposal, Gustaf Hoffstedt said:
“The government can hardly time its proposal to raise the gambling tax to a worse time. We are in a situation where fewer and fewer players choose to play on the safe licensed market, and more and more on the unregulated, unlicensed gambling market”.
Hoffstedt also concluded his remarks by asserting that the government’s proposed tax hike on gambling was a “Christmas gift” for the unregulated, unlicensed gambling market:
“That the government proposes to raise the tax for licensed gambling is the best Christmas present you can think of – to the unregulated and unlicensed gambling market’, he concluded (SBC News).
Meanwhile, Spelinspektionen, the country’s gambling authority, has neither approved nor opposed the proposed tax rise, noting that it has “no substantive views” on the matter. However, the authority promised to “carefully follow developments” to see what “consequences the proposed tax hikes may actually have on the Swedish regulated gambling sector.”
The gambling market in Sweden has undergone significant changes during the five years since the Swedish Gambling Act came into force on January 1, 2019. This seems to continue in 2024, as the government looks to strengthen online gambling safety while also clamping down on illegal gambling in the country.
For now, this bill underscores consumer safety, introduces tougher fines for money laundering offences, and sets new standards for gambling-related telephone sales in the Swedish gambling industry.
Latest Casino News
