Does Sweden end the grey era of gambling?

Sweden is seen by many online gamblers as the place where it all started and where free reign is allowed by the authorities. Sweden is the home of some of the most successful and well-known online market players. Firms listed at Casinopanett.eu include Betsson, NetEnt, LeoVegas, Casumo, and Boss Media are just a few which Sweden is hosting. Sweden is simply the place where new brands emerge and operate in a relatively uninhibited operating environment with an additional benefit of zero tax. According to some recent developments, the grey patch on which many online gambling firms operate will no longer exist.

The regulations proposed seem straightforward. These rules are meant to move the market from a confusing semi-regulated environment to a modern well regulated and fully liberalized market. Sweden has remained a grey market in Europe for a long time now. The move towards a regulated and taxed regime means that a significant chapter in online gambling is being opened.

The New Regulations

The new regulations are supposed to come into effect come Jan. 2019 have been proposed by the Swedish government. Applications for the new licenses should start being sent as from July 2018. The market will definitely change because the government says that the central government will regain control of the Swedish gambling market. It is likely the government seeks to create a market similar to that of Denmark where state monopoly plays a significant role in their overall spending. The sector might from next year see a short leash being extended to the online gambling players.

The Minister for Public Administration Ardalan Shekarabi said that the government is proposing legislation which makes it only possible for firms complying with Swedish rules get to conduct business in the country. This move will also give the government a chance to weed out those firms that operate without a license. The Minister added that penalties for unlawful gambling activities and promotion of unlawful gambling practices will be tightened. In addition, there will be an introduction of a new criminal classification and gambling fraud rules.

Why does Sweden stand out?

Lottery operator Svenska Spel has been an aggressive player in the online, sports and poker room market segments. The firm has in the past sent several requests to be allowed to offer casino games. The online gambling market in Sweden gets more than €900 million annually if ATG is included.

Based on Svenska Spel research, 21% of the Swedish online gambling market in 2016 belonged to them. This market share was based on mostly the lottery sales made with a minority through online sports betting and poker. Horseracing monopoly operator ATG got a 23% share while the remainder 54% was taken up by the grey market operators.

What will happen?

When these new rules are introduced, there will certainly be losers and winners. However, what operators will concern themselves with mostly are the long-term effects of the rules. It can be assumed that small operators will pull out of the market but fierce competitiveness will reign following the introduction of these regulations. Incumbent big operators will fight it out with the monopoly operators to have a share of the newly regulated market. According to CEO of Cherry, a major Nordic player, Anders Holgren, the competition will be tough in the short term but it should even out after some years.

By taking Denmark as an example, the market was initially dominated by ex-monopoly operator Danske Spil and a few foreign operators like Bet365 and Unibet. After the market settled down in 2012, LeoVegas is proving to be one of the operators to watch out for. The Swedish market will almost certainly thin out with the rise in costs and competition forcing more M&A activity.
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