EGBA: Swedish Government Risks Driving Online Gambling into the Black Market

The Gambling Market Inquiry, established to consider additional measures to those set out in Sweden’s Gambling Act which re-regulated the country’s online gambling market in 2019, has presented its long-anticipated report to the Ministry of Social Security.

The report proposes, among other things, further restrictions and limitations for Sweden’s licensed online gambling companies, including a new customer risk classification and additional marketing restrictions.

While there are proposals in the report which are welcome, including the introduction of gaming supplier licenses for game developers and suppliers, the European Gaming and Betting Association (EGBA) is concerned that the frequency and scope of regulatory changes in Sweden jeopardises the overall success of the country’s online gambling regulation and its ability to provide Swedes with a safe, attractive and regulated online environment where they can bet.

EGBA supports well-regulated online gambling markets but the constant proposals to change Sweden’s regulation, which was established less than two years ago, is creating policy instability for the country’s licensed companies. EGBA has previously outlined its concerns about the government’s introduction of temporary deposit limits for online casino in Q2 this year, which are now set to be prolonged until next summer. Generically imposed deposit limits, despite being well-intentioned, encourage many customers, including those experiencing problematic gambling behaviour, to exit the regulated market and play on black market websites which allow them to circumvent the limits.

The risks to consumer protection from black market gambling are very real, particularly for vulnerable customers: these websites are readily available, easy to access and do not apply any limits or responsible gambling measures, e.g. self-exclusion registers such as Sweden’s Spelpaus scheme. According to a recent study, 40% of Sweden’s online casino customers, and 34% of sports betting customers, already gamble on unlicensed and black market websites or would consider doing so in future. Given the risk of black market gambling, EGBA, therefore, encourages Swedish policy makers to consider the need for a delicate regulatory balance and the potential cause and effects of further restrictions on the licensed and regulated market in Sweden.

“EGBA members, including BOS, accept their shared responsibility to protect customers, and we are continuously considering what we can do more, but, fundamentally, the best way to protect customers is to ensure they play inside the regulated market with companies who are licensed in and apply the consumer protection laws in Sweden. The cumulative effect of more restrictions on the Swedish market will be less channelling and more unregulated black market gambling. Despite being well-intentioned, this would be clearly counter-productive and will damage the safety of the consumer,” Maarten Haijer, Secretary-General of EGBA, said.

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