SBC News Inspectorate's new metrics set Swedish gambling channelisation at 86%

Inspectorate’s new metrics set Swedish gambling channelisation at 86%

Spelinspektionen, Sweden’s Gambling Inspectorate, has revised the methodology for calculating the channelisation rate of Sweden’s online gambling marketplace.

Deemed the key measure of the regulatory balance in Sweden’s online gambling market, the channelisation rate represents the percentage of wagering volume accounted for by licensed operators.

Sanctioned as a regulatory assignment in 2023, the Inspectorate was commissioned by the government to redevelop the “calculation metrics for the channelisation of the Swedish gaming market.”

The assignment was to be reported on for the 2024 budget as part of a broader initiative to ensure that government authorities can monitor gambling trends and risks to national consumers.

As reported: “The Inspectorate believes that four different indicators together can give a picture of the degree of channelisation, and based on these indicators, the degree of channelisation for 2023 is calculated at 86%.”

The new channelisation rate was calculated using a new methodology that combines and evaluates four research segments: a player survey, interpretation of digital trends, estimates of turnover generated from internet traffic, and data from H2 Gambling Capital. The average of these four segments was used to calculate the final channelisation percentage.

The player survey was conducted by the research agency Enkätfabriken between June and July 2024, featuring responses to ‘quantitative measurements’ from 4,000 participants aged 18 or older.

In terms of digital trends, the new methodology examined traffic and SEO data to capture Swedish audiences engaging directly or indirectly with websites promoting unlicensed operators.

The findings from these research segments were cross-referenced with H2 Gambling Capital data on the Swedish market. The Inspectorate has “previously used information from H2 Gambling Capital to calculate the degree of channelisation in the Swedish market.”

Prior to the assignment, H2 reported that “Sweden’s channelisation rate is the fourth highest in Europe, with a channelisation rate of 92%, which is slightly higher than Denmark (90%) but lower than, for example, Great Britain (97%).”

The 2023 observations conclude: “The total net turnover (players’ stakes minus paid winnings) for licensees with a Swedish gaming license amounted to SEK 27.1 billion in 2023. The competitive part of the gaming market had a turnover of SEK 17.3 billion.”

Audiences were reminded of the ‘historical challenge’ of interpreting channelisation rates, as prior to 2019, the rate was estimated at less than 50% due to the lack of regulatory controls over online gambling.

In 2019, Sweden launched its new Gambling Act regime, regulating online gambling, with the government aiming to maintain a channelisation rate above 90% as a key metric for consumer protection against criminal activities.

The assignment calls for further measures to combat unlicensed gambling, as a significant number of Swedish players continue to gamble at unlicensed companies, which operate in a regulatory “grey zone” outside the scope of the Gambling Act, making it difficult to enforce the law.

Authorities have been recommended to take direct enforcement measures to restrict or ban skin betting websites.

Further research found that 22% of players did not know whether they were gambling on a licensed website, while others believed they were receiving better incentives and chances of winning on unlicensed websites.

SBC News Inspectorate's new metrics set Swedish gambling channelisation at 86%

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