Sweden recently ended its gambling monopoly and now offshore operators are cleaning up new customers.
Under the monopoly, which ran fort many years, domestic operators were the sole provider of gambling services to the Swedish public. The levels of people using offshore operators were significant, so it made sense to at least get a cut of these revenues by making them legal.
Market share rapidly shifting
While the domestic operators naturally have a lot of accounts registered, they have been rapidly losing market share to the global operators that have entered the market.
A recent survey, conducted in June, shows that almost 60% of adult Swedes have opened an account on a gambling platform. About 58% of these accounts were with domestic operators such as Svenska Spel (for betting), ATG (for horse racing) and the Postkodlotterity (the lottery).
The balance of 42% of the accounts was with international operators, such as LeoVegas, Unibet and Bet365. Despite the ending of the monopoly, 60% of the accounts that were registered in the previous year were with online operators that don’t have a Swedish gambling license.
International operators have been aggressively marketing their offerings in recent times. Sweden is still making extensive changes to its online gambling scene. More changes are to be introduced in January 2019. Companies want to have their branding printed inside of the brains of Swedes by the time these new regulations are rolled out.
The Swedish authorities continue to clamp down on gambling advertisements and will do so until the new laws come into play. For example, at the start of October, an online media group called Nyheter24 was fined after running banner ads that were advertising international gambling online operations.
This led to a number of online media sites changing their policies and stopping accepting gambling-related advertisers. One of those was a Swedish football news media site called Outlet. Advertising had been its most lucrative revenue source and the site is losing approximately $55,000 annually.
Outlet is no longer accepting ads from any gambling operators, not just international ones. Part of its reasoning behind this move is to enhance its journalistic integrity. The company also wants to investigate match-fixing without being concerned that an advertiser may be involved in such incidents.
Big changes in Sweden
Most of the Scandinavian countries have traditionally been protective of their gambling sectors. Norway, for example, still maintains its state-run monopoly on the sector.
The monopoly in Sweden continues until January 2019. Sweden received criticism in 2013 from the European Commission about its gambling stance. The monopoly was violating a number of EU laws, mainly the European Treaty that means EU countries must allow offshore operators to obtain gaming licenses.
Operators have been catering for Swedish residents for many years without having a license. They ignored the law and were not penalized for doing so. One of the reasons Sweden is ending the monopoly is down to concerns that criminal activity is being fuelled in Sweden through unregulated gambling offerings.
Since 1 August, offshore operators have been able to apply for an online gambling license and more than 60 such operators have done so to date. Those with licenses will pay an 18% tax on revenues. No tax will be paid by the state-run operators in the future.
The Swedish Gaming Authority will be overseeing most of the changes and will have more power now to shut down illegal sites.
Some teething problems have been experienced during the application process. A number of applicants failed to provide sufficient information. There is also a lack of information out there as to what exactly the new regulations are going to entail. Some operators are concerned that concrete answers have not been provided.
However, the forthcoming changes are likely to be a positive move both for Sweden and the international operators, who will be able to advertise in this market without fear of penalization and cater for a new audience.