Recognised as one of igaming’s most lucrative marketplaces, conditions in Sweden have been drastically altered following the government enforcing a series of wagering and deposit restrictions.
The safer gambling measures were instantly criticised by licensed operators as well as the country’s regulator. The panel discussing ‘the fallout from Sweden’ at the SBC Summit Barcelona – Digital weighed in on developments.
Moderated by Jesper Kärrbrink, Creative Director at Green Jade Games, the panel struggled to find any positives that have come about as a result of the re-regulation of the market – with the introduction of player protection measures, channelisation and credibility being among the most favoured outcomes.
Drawing comparisons between the Danish and Swedish market, Morten Ronde, Managing Director of Nordic Gaming, explained that the defining difference between the two jurisdictions was the laws regarding bonus offers – pointing out that the prohibition of such promotions in Sweden has reduced the competition among operators.
Ronde said: “Not only is the purpose of the Swedish and Danish legislation the same, I’d say the wording of the law is almost identical. I’d guess that 80% of the law is the same – but it’s that final 20% that makes the difference. What you don’t see in the law is the dealings of the local gambling authority. Bonusing is a major difference between the two countries.
“Our industry very much depends on the bonus offers, but it goes beyond that because it’s also sales promotion too. When a digital industry says that you cannot make offers to your customers, it would effectively reduce the competition in the market which is effectively what has been done in Sweden.
“Denmark obviously has strict regulations when it comes to bonus offers, but they are still permitted. The authority in Sweden has created a very non-transparent market because there is no communication for the operator or supplier with the gambling authority – you have to communicate through your representative. But in Denmark, every company has two contact persons within the gambling authority, and a lot of issues are cleared out this way. In Sweden, it is decided by these decisions made by the authority that creates a massive liability for suppliers.”
Addressing the ‘elephant in the room’ regarding the 5000 SEK deposit limit, panellists were in overwhelming agreement that the government-mandated measures would significantly impact on channelisation rates, which could in turn result in a ‘re-regulation of the market’.
Thomas Vermeulen, Affiliate & Internationalisation Manager at Smarkets, asserted his opinion that the limits would not necessarily have a negative impact on the typical player but would rather have a huge effect upon the high-value customer – subsequently driving them to play via offshore sites.
He explained: “I think the limits will have a negative effect. There was previously a report which showed that the average loss of a Swedish gambler over the year was roughly 5600 SEK, meaning that only a small percentage of the user base is generating a large portion of the revenue while a large majority are playing with significantly lower amounts.
“I don’t think that the smaller players are really affected by the measures, but the bigger value players are still playing, albeit somewhere else. They’re now playing offshore.”
Fintan Costello, Managing Director at BonusFinder, expressed his complete disregard for the idea that the new measures were introduced to protect players, arguing that the ‘ridiculous’ measures were merely a political decision.
He added: “It’s obvious that it’s a nonsense piece of legislation. It’s clearly a soundbite for a politician to use as part of the next election campaign. The practicalities of this are ridiculous – players can still open up multiple accounts, they can still bet offshore.
“It’s failing in protecting those that it’s aimed at. It’s clearly just politics – I’d argue that it’s not even aimed at player protection, it’s just pure politics.”
Politics does play a factor in the decision behind where to introduce the measures, Gustaf Hoffstedt, Secretary General for the Swedish Trade Association for Online Gambling explained – pointing out that verticals which were owned – or associated with – the government faced little in the way of deposit limits.
He said: “We shall remember the temporary measures and other issues which are hurting the gambling regulation – which are not from the gambling authority but from the government. They believe that they have reasons to safeguard a number of land-based gambling operators.
“We must remember that they still own Svenska Spel, as well as the majority of the seats on the board of ATG. The social democratic party also own their own lottery company. They have reasons to safeguard particular verticals within the gambling industry. With the temporary measures, it’s really interesting that the government advocated for these measures due to a fear that online casino activity would heavily increase due to COVID-19.
“This issue was addressed in Denmark – the Danish regulator looked at the numbers and dismissed them. Sweden implemented the restriction despite what happened, which is that trotting had a large uptick in activity due to sporting restrictions, while online casino activity stood still. Despite this, trotting was not subject to the temporary restrictions, but online casinos were.
“Of course this will have a negative impact on channelisation. When we measured channelisation earlier this year, it was between 80-85%. When it comes to online casino, this dropped slightly to 75%. Once the limits were introduced, we asked Copenhagen Economics to estimate what channelisation rates will be, and they estimated that future channelisation would reach between 52-63% – which is incredibly close to the reason as to why Sweden re-regulated for the first time.
“We may have to re-regulate the Swedish market once again – and I’m not entirely convinced that the privately-owned businesses will be as enthusiastic as it was a few years ago when the government first asked us to re-regulate.”