Svenska Spel

The Swedish gaming market

Svenska Spel competes both with Swedish regulated gaming companies and foreign ­gaming companies without permits – and an illegal market. Competition in the Swedish market has increased in pace with technological developments.

The Swedish gaming market has proved to be unaffected by economic uncertainty. The market continued to grow in 2012, the greatest growth of which was betting on sports games, online casino games and mobile games. Un­­regulated companies continued to capture market shares during the year.

Social considerations behind regulations

According to Swedish law, it is essentially illegal to organise gaming for monetary gain for the general public. To prevent the emergence of illegal gaming, the State has granted exemptions for a few gaming companies that conduct regulated operations in which social consideration, supervision and inspection are assigned priority. The Swedish Gambling Authority bears overall responsibility for ensuring that the Swedish market is legal, safe and reliable.

Increasingly intense competition

Competition in the Swedish gaming market is increasing with unabated force. Both domestic, regulated companies and foreign companies with multinational operations are active in the confirmed Swedish gaming market. The wholly ­State-owned Svenska Spel, the State-controlled AB Trav and Galopp (ATG), Folkspel, bingo halls, PostkodLotteriet, Kombi­spel and Miljonlotteriet are the largest Swedish operators. Private operators of restaurant casinos also account for a minor share of the market.

There are approximately 150 foreign-based Internet gaming companies that target Swedish players. Examples include the UK company Ladbrokes, which is based in Gibraltar, and Unibet, Pokerstars and Betsson, which are all based in Malta. They lack permits to operate in Sweden and are not subject to the same laws, tax regulations and restrictions that apply to companies that comply with Swedish gaming regulations. They compete in similar forms of gaming such as poker, bingo, sports games, numbers games, lotteries and online casino games.

Online casinos gaining serious momentum

The gaming form that has accounted for the greatest growth in the gaming market in recent years is online casinos, for which Svenska Spel lacks permits. The Internet offers a wide and growing range of slot machines and table games, which, in physical terms, are strictly limited to Svenska Spel’s casinos and Vegas in Sweden.

Marketing in the confirmed Swedish gaming market is increasing and the foreign-based Internet companies’ marketing of online casinos accounts for a significant share of this increase. In 2004, unregulated companies accounted for 18% of the gaming market’s overall media investments. Eight years later, they accounted for 55%. At the same time, Svenska Spel’s share of the overall media investments has proceeded in the opposite direction – from 46% in 2004 to 21% in 2012.

In Svenska Spel’s assessment, online and mobile casino games generate as much net gaming revenue as Svenska Spel’s four casinos combined. Read more about the gaming industry’s marketing investments.

Illegal gaming market

In parallel with the confirmed gaming market, there is an unknown illegal market with gaming machines and gaming clubs operating without a permit. The Swedish Gambling Authority estimates that there are a few thousand illegal gaming machines nationwide that have a combined turn­over of several billion annually. Organised crime syndicates are often behind the illegal gaming machines. Police crackdowns are conducted every year and machines confiscated, but to date such measures have proved insufficient in halting the illegal operations.

In December 2011, the Supreme Court ruled that gaming machines that offer monetary gains and that are liked to ­foreign servers are illegal. This means that only State-owned companies can secure permits to organise games for monetary gains on gaming machines. In other words, the law supports taking action against illegal gaming machines. In 2012, the Swedish Gambling Authority filed about 100 police reports concerning these machines. The results of the efforts remain to be seen since the legal processes take time and those deploying illegal gaming machines try to find new ways of circumventing legislation.

Ban on advertising from foreign-based companies tried by the Supreme Court

For many years, foreign gaming companies have advertised in Swedish dailies despite an explicit ban on advertising from foreign-based companies in the Swedish Lotteries Act. One aim of the ban on advertising from foreign-based companies is to ensure that the companies that have permits to conduct gaming activities can do so without competition from un­­supervised companies that lack permits. This ban is a key ­element of being able to uphold the objectives of Swedish gaming policies.

In 2012, the Supreme Court tried the matter of whether the penal sanctions in the event of transgressions of the Swedish Lotteries Act’s ban on advertising from ­foreign­-based companies may contravene the EU’s non-­discrimination law. The case concerned advertisements for foreign gaming companies in two evening papers. The Supreme Court ruled that the indicted editors-in-chief could not be convicted of breaking the ban on advertising from foreign-based companies since the consequences would be more severe than if the advertisements had pertained to a Swedish lottery without a permit. Nonetheless, it remains forbidden to place advertisements for foreign gaming companies and the Swedish Gambling Authority still has the ­ability to fine the publications and Swedish TV channels that accept advertisements for ­foreign gaming companies.

The European Commission follows up cases of transgression

In October 2012, the European Commission sent a statement to the Swedish government requesting feedback on how potential reform work in the gaming market is progressing.

Behind this statement lies the cases of transgression that were initiated a couple of years ago by the European Commission against Sweden and a number of other EU countries. Since legal practices in the EU have evolved and legal developments have also been made in gaming in certain member states, the Commission wants a comprehensive and updated outline of the legal scenario in terms of online gaming ­services. In its reply to the Commission in December 2012, the government explained that the Gaming Inquiry’s proposal, in the form of an official report entitled "A future gaming regulation" (SOU 2008:124), was being drafted and that the government intends to make proposals to the Swedish parliament at a later date in the aim of enacting a properly functioning regulatory framework in the area.

The Swedish National Audit Office studies the government’s role in the gaming market

In May 2012, the Swedish National Audit Office presented a report concerning the study of the government’s role in the Swedish gaming market. The aims of the study included assessing the extent to which gaming regulations contribute to fulfilling the parliament’s goals for a sound and secure gaming market. In the Swedish National Audit Office’s assessment, developments in the gaming market are causing a risk in the rise of gambling addiction, particularly within certain groups, and that the means of control that are currently available are insufficient to prevent this.

The Swedish National Audit Office does not believe that the current issuing of permits and supervision are ­sufficiently effective or adapted to the risk levels in the ­various games. Furthermore, the Office does not believe that there is sufficient knowledge about the causes of ­gambling addiction or about what preventive actions are the most effective.

According to the study, Svenska Spel’s social consideration efforts were insufficiently evaluated, but the Swedish National Audit Office believes that Svenska Spel could do more to counteract gambling addiction. The company has now initiated an independent study of responsible gaming to evaluate the impact of the actions. Read more about the Swedish National Audit Office’s recommendations to Svenska Spel.

Proposition on new gaming regulations

The Court of Justice of the European Union has ruled that every member state must independently determine its approach to regulating the gaming market. The license ­system or more restrictive regulations, such as a monopoly, are permitted.

The rapid changes in the gaming market, particularly as a result of rapid developments in online gaming, have underscored the need to modernise and tighten gaming regulations. Based on the gaming policy goals that the regulations are to contribute to achieving, the regulations are unsatisfactory in their current formulation.

In the media, the gaming policy representatives for the government parties have stated that they are in agreement on the implementation of a license system.

Shortly after the Swedish National Audit Office presented its report from the study of the Swedish gaming market, the Minister for Financial Markets, Peter Norman, announced that the government intends to draft a proposition on new gaming regulations prior to the end of the mandate period, meaning the autumn of 2014. However, the exact formulation of the amended regulations and when they might come into effect remains to be seen.

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