Sweden: Gaming Operators Face New Challenges from Regulatory and Market Forces

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Licensed gaming operators in Sweden have been unpleasantly surprised, as on Thursday Social Security Minister Ardalan Shekarabi proposed a set of restrictive measures to help mitigate the risk of developing bad gambling habits due to the spreading coronavirus that keeps people at home. The proposal built around deposit and gaming time limits will be up for public discussions until May 7, expected to come into force from June 1 and remain in place throughout 2020.

According to the minister, online gambling is one of the most risky forms of gambling and, worried from the spike in casino player activity reported from Swedish online operators, due to the lack of sports betting, he initially warned the industry some restrictions were brewing. Initial speculation was a temporary shutdown of online casinos was considered.

Deposit and Time Limits

It turned out a weekly gambling deposit limit of SEK5,000, paired with a corresponding loss limit for slot machines, as well as mandatory self-imposed time limits for gambling in online casino were in the works.

Minister Shekarabi expressed his concerns that during the times when employment for many people in the country was at risk, that increased online casino activity was a clear sign for the government to act to protect consumers.

Regulator Role

As part of the proposed measures, the country regulator, Spelinspektionen, will be tasked to submit monthly reports to the government, undertake actions to increase public awareness regarding the self-exclusion registry, as well as propose further measures to protect gamblers from excessive harm.

In terms of its regulatory duties, Spelinspektionen will have to strengthen its efforts towards preventing unauthorized gambling operators from accessing the local gaming market, utilising additional tools to help perform this task.

Industry Strongly Opposed the Proposal

Regarding the proposed from the Social Security Minister measures, the Swedish Trade Association for Online Gambling published a report from the independent consultancy firm Copenhagen Economics, clearly showing general declining development on the competitive side of the gambling market, with 81%-85% channeling for sports betting, and for online casino even lower, 72%-78%. In other words, market was not moving towards the government target of 90%, but away from it.

At the same time, one of the biggest events in the online gambling industry is taking place, the SBC Digital Summit. The 5-day virtual conference event features a comprehensive agenda and industry-wide representation with 140 industry executives, gathered to share insight into how to help the industry rebound.

The general consensus so far is that further restrictions will be disruptive to an already disrupted environment, and it is up to the operators to prove there is no need for them, while maintaining industry standards for protecting customers. Some operators said they pushed up monitoring of risky behavior to prevent customers from excessive losses. Others shared the opinion that, while under lockdown, customer habits have changed and that shift would even accelerate more after the removal of the restrictions, as some habit changes are here to stay permanently.

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