Analysis: The debate over Sweden’s online casino limits

By Owain Flanders

On 2 July this year, the Swedish government introduced online casino restrictions in an effort to combat problem gambling amid the COVID-19 pandemic. The country’s social security minister Ardalan Shekarabi said the crisis posed “great risks in the gaming sector.”

The restrictions include a maximum weekly deposit limit of SEK 5,000 ($578.76) for online casino customers and an SEK 100 limit to bonus offers. Crucially, Sweden’s horse racing operators are not included among the list of gambling companies who must adhere to the limitations.

Earlier this week, the Ministry of Finance proposed that the temporary limits be extended until 30 June 2021.

This news was not taken lightly by the country’s online operators. Branschföreningen för Onlinespel (BOS), the Swedish Trade Association for Online Gambling, has made clear its opposition to the extension. In a statement on its website, BOS argued the predicted rise in online casino gambling which necessitated the restrictions had not materialised. Instead, horse racing betting had seen a steep increase.

“All actors on the gambling market, such as the Swedish Gambling Authority, we and the government, knew this but unfortunately the government persisted in the erroneous claim that online casino activity would increase and that special restrictions were therefore called for regarding that form of gambling,” commented Gustaf Hoffstedt, secretary general of BOS.

“It is unfortunate that we can only state that the government is now making a double mistake when it, with the same erroneous claims about increased online casino gambling, extends the restrictions.”

On the other side of the argument however, is Swedish horse racing company AB Trav och Galopp (ATG). The operator has voiced its support for an extension to the restrictions, arguing that it would help protect players against gambling-related harm as the pandemic continues. Not only that, but ATG CEO Hans Lord Skarplöth has even urged the government to consider introducing a permanent loss limit into the country’s online casino regulation.

He said: “I was one of those who applauded the restrictions when they were launched. Although I still believe that a mandatory loss limit at online casinos would have been more effective than the current deposit limit.

“With that reservation, it was a right decision then, and a right decision today. Extending the current measures feels like a reasonable measure in a time that is in many ways troubled.”

Clearly we have two heavily vested interests here, so it is important to consider the facts.

It is evident the deposit and bonus limits are not having too great an effect on profits. For example, Betsson saw revenue of SEK 1.67bn for Q3, a rise of 31% year-on-year. The operator’s online casino increased by 39% with CEO Pontus Lindwall attributing this in part to the successful launch of Jalla Casino in Sweden. Svenksa Spel also saw gains in online casino, with its sport and casino business revenue increasing 7% year-on-year to SEK 490m.

With online casino revenue still on the rise despite limits, what is the main problem for operators? Well, Hofftedt’s argument revolves around the black market; namely that the restrictions increase its attractiveness to vulnerable customers. While this might be an argument we hear a lot in opposition to regulation, it is always a relevant one - particularly in a market where channelisation levels have not been hitting targets since re-regulation.

Hoffstedt also disagrees with the exemption of horseracing, citing a significant rise in the vertical. It is clear from ATG’s Q3 performance there has been growth in this area. The operator reported a year-on-year rise in revenue of 18% to SEK 1.38bn for Q3 2020. Although the company does have an online casino segment, the majority of that growth originated from horse racing. This segment was up 17% to SEK 1.19bn for the quarter, generating around 88% of total revenue for the operator. In comparison, ATG’s online casino revenue fell to SEK 58m, down 8%.

There is certainly something to be said for regulatory consistency. While horse racing operators such as ATG are now able to fully capitalise on new growth, online casino operators clearly feel they are being targeted by policy makers with these restrictions. It is difficult to discern what makes online casino gambling more dangerous than horseracing, but evidently that is the Swedish government’s standpoint.

Data also shows there has been no significant increase in problem gambling in other markets that haven’t employed such restrictions. In fact, in June, Malta Gaming Authority head of EU affairs and policy, Yanica Sant, told Gambling Insider there was no evidence to suggest emergency gaming measures were necessary during the pandemic. 

Ultimately, the Swedish government has to take stock of the facts and look towards other markets to assess whether there is legitimate reason for concern moving forward. Only using this evidence-based approach can it hope to enact legitimately helpful legislation.


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