Stiff competition in a growing market

The Swedish gaming market is made up of regulated gaming companies and, in Sweden unregulated gaming companies, but also an illegal gaming market. Growth takes place online, which is where unregulated gaming companies continue to take market shares.

After a temporary decline in the Swedish gaming market in 2014, due to Svenska Spel’s launch of obligatory game registration, the market recovered in 2015.

Svenska Spel still has the largest market share in total, although it has diminished in step with the growth of the gaming market. The competition from the unregulated ­gaming companies, which are estimated to have more than half of the online market, is considerable. Svenska Spel’s ­market share totals 42% (43). Svenska Spel’s online market share is estimated at 20% (20) for 2015.

Net gaming revenue for the regulated Swedish gaming companies amounted to approximately SEK 16,700 million (16,500). After adding the unregulated gaming companies’ net gaming revenue of SEK 4,900 million (4,200), the total known Swedish gaming market amounted in 2015 to SEK 21,600 million (20,700).

Growth driven by new game forms

To a great extent, gaming growth depends on the launch of new game forms. Competition is greatest within fast online games, such as online casino games, a game form that is currently not in Svenska Spel’s offering. Online sports betting is also continuing to grow. The increasingly popular games are found among the unregulated, offshore gaming companies that offer their games online. To a greater extent, customers demand games with higher wins and high jackpots.

Competition on equal terms

Swedish gaming regulations have been out of step with the market for a long time. Swedish regulated gaming companies, NGOs and unregulated, offshore gaming companies do not compete on equal terms. In September 2015, the directives were presented for an investigative committee, which is expected to result in a licensed market in 2018 at the earliest. The focus of the investigation is customer protection, marketing, the State’s revenue and Svenska Spel’s role in the future. A licensed market enables Svenska Spel to compete on equal terms.

A functioning ban on advertising is also necessary to ­realise competition on equal terms. For many years, offshore gaming companies have been able to advertise in Swedish dailies despite the explicit ban on advertising stipulated in the Swedish Lotteries Act. One aim of the ban is to ensure that the companies that have permits to conduct gaming operations can do so without competition from unregulated gaming companies. However, the ban does not work in reality and the Swedish Gambling Authority has tightened the marketing guidelines for regulated companies.

Companies active in the Swedish gaming market:

Companies with permits to operate in Sweden:

  • Svenska Spel
  • AB Trav och Galopp (ATG)
  • Folkspel
  • PostkodLotteriet 
  • Restaurant casinos
  • Bingo halls
  • Other NGO lotteries

Examples of unregulated gaming companies:

  • Bet365
  • Unibet
  • Pokerstars
  • Betsson
  • Expekt
  • NordicBet
  • Mr Green
  • Leo Vegas
  • Ladbrokes

Reduction in media investments

In 2015, the gaming industry cut back advertising investment, excluding online marketing, by some 13% to SEK 3,168 million gross. The offshore companies account for approximately 63% of the marketing in Sweden. Since 2011, Svenska Spel’s share of total advertising investment, excluding online marketing, decreased from 23% to 11%. Digital investments are not included in the reported figures. Because a large part of the industry’s investment transfers are to digital media, the unreported figures are presumed to be large, particularly for the unregulated gaming companies whose operations are exclusively conducted in online stores.

Advertising investments in the Swedish gaming market

Source: TNS SIFO Market Research's advertising surveys (gross investments, excluding internet and direct mail).