Sweden’s Gambling Act review won’t solve channelisation problem
Gustaf Hoffstedt, the Secretary General of the Swedish gambling trade body BOS, expresses skepticism regarding the government’s review of gambling regulations, suggesting it may not effectively address the declining channelisation rate in the country.
“This presents yet another repressive measure from the government,” Hoffstedt remarked in an interview with iGB, responding to the review of the Gambling Act announced on February 25. “What is essential is to liberalize the licensed market to enhance its appeal to consumers.”
Gambling Act Review: Addressing Black Market Loopholes
On February 20, Sweden’s government initiated a review of the Gambling Act aimed at combating the escalating prevalence of illegal gambling websites. This investigation will extend until September and will evaluate potential measures designed to make operations more difficult for unauthorized entities operating within Sweden.
The impetus for this review stems from an open letter issued by Hoffstedt and BOS on February 16, urging the government to rectify gaps in gambling legislation that allow illicit operators to engage with consumers.
In the correspondence, Hoffstedt highlighted that under Sweden’s current regulatory framework, unlicensed operators face prohibition solely when specifically targeting Swedish consumers or processing transactions in the local currency, SEK.
To circumvent these regulations, numerous black-market providers market their services in English and transact in euros, exploiting loopholes to attract Swedish players.
The overarching goal of the Gambling Act review is to “effectively shut out unlicensed gambling,” as stated in a letter from the Swedish government, soliciting insights into the present gambling landscape.
The Risk of Further Repression
Hoffstedt has been a long-time advocate for a more liberalized regulatory approach to gambling in Sweden, arguing that increasing restrictions on licensed operators only serve to bolster the black market.
He anticipates that the forthcoming review will likely yield additional constraints on the legal gambling sector. “Neither the previous social-democrat-led government nor the current administration has taken proactive steps to enhance the attractiveness of the regulated market to consumers,” Hoffstedt explains. “My pessimistic outlook is that we will continue to grapple with channelisation issues in the foreseeable future.”
Despite stakeholders indicating a slight uptick in Sweden’s channelisation rate between 2023 and 2024, this figure remains significantly below the Swedish regulator’s target of 90% set at the launch of the licensed market in 2019.
BOS and the monopoly horseracing operator ATG estimate the channelisation rate to be approximately 77%. In its latest report for Q3 2024, ATG revealed a tenfold increase in traffic to unlicensed domains since 2019.
Additionally, Hoffstedt noted that the regulatory authority (Spelinspektionen) recently downgraded its channelisation estimate to 86% based on revised data from H2 Gambling Capital.
Timeline for the Gambling Act Review
Despite his concerns, Hoffstedt views the government’s initiative to take action positively. He expects that any new legislation resulting from the full review will be enacted before the next general election in Sweden, scheduled for September 2026.
“I anticipate that the new legislation will be on track during this mandate period, which concludes in the autumn of 2026,” he stated.
In an optimistic scenario, he hopes the legal adjustments could go into effect by New Year’s 2026, contingent upon the current government.
The review process will require extensive scrutiny as any proposed changes must pass through a detailed approval framework. This includes being presented to the wider parliament for a vote.
“The investigator is set to present their report in September. Following this, there will be a referral period allowing stakeholders to respond to the investigator’s recommendations. Subsequently, the government may choose to dismiss, modify, or adopt these proposals. Given the circumstances, it is likely the government will adopt the recommendations, which will then undergo a constitutional review to ensure compliance with the Swedish constitution,” Hoffstedt explained regarding the timeline.
Ultimately, it will be the parliament’s responsibility to vote on these recommendations and update the existing legislation.
