New report says Sweden gambling regulator “not effective enough”

Recent findings from the National Audit Office (Riksrevisionen) have prompted serious concerns about the efficacy of Spelinspektionen, Sweden’s gambling regulatory body. According to the audit, the regulator is falling short in its monitoring of licensed operators and requires an overhaul of the existing laws surrounding illegal gambling operations.

The comprehensive 97-page report meticulously evaluates Spelinspektionen’s performance since the inception of Sweden’s regulated gambling market in January 2019. Significantly, the document underscores that the current regulatory framework is “not effective enough” to uphold the government’s initial expectations.

Ambiguities in Black Market Regulation Necessitate Enhanced Powers for the Regulator

The report goes beyond merely scrutinizing Spelinspektionen; it also criticizes government inaction concerning the thriving black market. Despite Spelinspektionen’s repeated calls for intervention, the document highlights a pronounced lack of action to address these illegal gambling activities.

The inability to effectively control illegal gambling is a pressing issue for the regulator. Existing regulatory constraints make it challenging to geoblock unlicensed foreign operators who continue to undermine the integrity of the market. Furthermore, the report underscores the confusion surrounding what constitutes an illegal operator, urging the government to reevaluate the regulatory framework and expand its jurisdiction to encompass online games accessible to Swedish players.

Echoing the report’s sentiments, Gustaf Hoffstedt, CEO of the gambling trade body BOS, stated, “The definition of illegal gambling is overly narrow, encompassing only unlicensed companies that utilize clear Swedish markers, such as Swedish language support and transactions in Swedish krona.”

Insufficient Inspections of Licensed Operators

The report further condemns Spelinspektionen for conducting an inadequate number of inspections on licensed operators. It emphasizes that inspections should not merely be a formality but instead rooted in comprehensive risk analyses to effectively safeguard the market.

Riksrevisionen calls for a systematic approach to inspections, necessitating regular updates to the methodologies employed. “To enhance effective oversight, Spelinspektionen must delineate responsibilities within its units clearly,” asserts the report.

Moreover, inspections of commercial online gambling operations have been far too limited, extending to sub-markets, which include competitive markets, non-profit lotteries, and exclusive state offerings. “To maintain credibility in the regulatory framework, it is imperative that all licensing types and game forms undergo consistent scrutiny,” the report cautions.

Failure to Evaluate Regulatory Reforms

Another point of concern highlighted in the report is Spelinspektionen’s lack of follow-up on regulatory changes. While the regulator has established certain processes aimed at conflict of interest management and supervision, it has failed to assess the efficacy of these processes systematically.

According to Riksrevisionen, “Spelinspektionen’s planning for supervision requires significant enhancement, with a focus on systematic risk analysis.” On a positive note, the report does commend Sweden’s willingness to evolve its regulatory environment continually.

Key Recommendations for Enhancing the Swedish Gambling Market

The report articulates a series of recommendations aimed at fortifying both Spelinspektionen and the government’s role. For Spelinspektionen, it recommends:

• Developing comprehensive planning and oversight processes for its regulatory activities.
• Conducting systematic risk assessments and formulating annual supervisory strategies.
• Augmenting the scope and effectiveness of inspections across both licensed and unregulated markets.
• Establishing robust reporting systems to address internal deficiencies.

Conversely, the government is urged to bolster its support for Spelinspektionen, ensuring it has the necessary authority to enforce compliance effectively. Additionally, enhanced transparency in monitoring efforts should be provided for both governmental oversight and public consumption.

Addressing High-Risk Gambling Requires Immediate Attention

Claudia Gardberg Morner, director of Riksrevisionen, emphasized the critical nature of these changes, particularly concerning high-risk gambling segments. She stated, “Supervision must focus on high-risk gambling forms such as commercial online betting, which necessitates stricter controls alongside the eradication of illegal gambling.”

Furthermore, she urged the government to clarify licensing requirements for online gambling to facilitate effective regulatory oversight.

Responding to the report, Spelinspektionen’s director general, Camilla Rosenberg, expressed enthusiasm for the audit’s findings, indicating a commitment to collaborate with the government on innovative regulatory solutions. “We welcome the review and recognize the critical evolution that has occurred since the new regulatory framework was established,” Rosenberg noted. She also mentioned a budget increase for 2024, which she believes will be pivotal in enhancing the regulator’s capabilities.

BOS echoed support for the report’s recommendations, underscoring the necessity for strengthened regulatory measures to ensure a transparent and compliant gambling environment in Sweden.