ATG report casts further doubt on effectiveness of Swedish betting market

ATG argues that the Swedish government’s target channelisation rates, reflecting the number of consumers being directed to the regulated betting market, are far from being achieved.

In a recent report, the operator of Sweden’s totalizator horse racing betting system estimated that the channelisation rate in Q4 2024 stood at around 69-82% – far below the government target of 90% and raising concerns around player protection and money laundering.

ATG claims that there are 20 unnoticed gaming sites targeting Swedish customers overall. However, key highlights from the report suggest some serious discrepancies across the full business chain behind both the regulated and unregulated market in Sweden.

Of the 20 illegal sites, 17 use the same platform providers as licensed operators while six of the ones with the highest traffic allowed direct deposits and withdrawals via BankID, a digital verification system used by well over 90% of Swedes.

Tough adjustments remain for Sweden

The report suggests that the Swedish government and the Swedish Gaming Authority (SGA), the Spelinspektionen, have a lot of issues to address as the country continues to adjust to regulated, multi-licence gaming, nearly six years on from market launch in 2019.

“It is unreasonable that such a large proportion of gambling still takes place outside the license system,” said Hasse Lord Skarplöth, CEO of ATG.

“Unlicensed gambling is a breeding ground for money laundering – but above all, Swedish players are left without protection from rogue actors.”

Like other Nordic nations, Sweden used a monopoly system of gambling for most of the local industry’s history, with the state-backed Svenska Spel the only company permitted to offer betting, gaming and lotteries.

In 2019, a regulated market was launched and various local and overseas companies have set up shop in the country.

Notable licence holders include local operators like LeoVegas, Kindred’s Unibet and 32Red, and Betsson, along with major overseas players like bet365, Betway, 888sport and WIlliam Hill, and the market saw turnover of SEK 27.8bn (£2bn) in 2024, a 3% year-over-year growth rate.

Despite six years of adjustments, unlicensed gaming is clearly still causing sleepless nights for some of the sector’s biggest stakeholders, and regulatory action does not seem to be having the desired impact.

ATG notes that two of the 20 illegal sites with the highest traffic were on Spelinspektionen’s list of banned sites, while the unlicensed market accounts for SEK 150bn (£11.4bn).

“Unlicensed gambling has an annual turnover almost as much as the entire cost of a Swedish primary school,” said Skarplöth.

This does raise the question as to how authorities can adequately address the unclean market. Since these firms are unlicensed, punishing them with fines or similar enforcement actions doesn’t quite add up – the illegal companies simply wouldn’t pay it.

The government is aware of the need to improve market regulation though. In a 105 page report published last month, the National Audit Office made a critical report about the Gambling Authority’s recent supervisory work. The most damning conclusion was that the objectives of the 2019 re-regulation have not been fully achieved.