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Mike Johnson February 25, 2021 3 min read
Sweden’s Black Market Is ‘The Problem’ Say Operators
Ardalan Shekarabi, the Swedish minister of social affairs, has confirmed that the country continues to address problem gambling, specifically the illegal gambling market.
Sweden Reaffirms Commitment to Tackling Illegal Gambling
Sweden continues the good fight against gambling addiction and illegal operators as the minister of social affairs, Ardalan Shekarabi, has reiterated the country’s commitment to protecting vulnerable consumers during the pandemic and amid an ongoing inquiry.
The latest measure focuses on protecting the regulated market as a conduit of good and consumer-focused industry practices. Sweden has stepped up its efforts significantly since the country first introduced regulated gambling, too.
Criminal penalties are lifted against unauthorized gambling companies that operate without obtaining a formal go-ahead from the Spelinspektionen, the country’s gaming regulator.
Shekarabi noted that the country is preparing a review of the progress achieved so far. That review is going to put a particular focus on the black market and the way illegal websites continue to operate.
In his position as minister of social affairs, Shekarab acted swiftly when the pandemic first hit Sweden last year. The country enforced strict gaming controls, which stakeholders objected to, arguing that they would reinforce black market companies’ positions and render their businesses uncompetitive.
These concerns continue to echo today, as companies are cautioning that their channelization rate – roughly the rate of acquiring new customers – has contracted to 75%.
Most of these measures stem from the restrictions introduced by Shekarabi himself last year, including loss limits, session limits, and lack of bonuses beyond the sign-up offer. They have been recently extended through June.
However, while the regulated market has played ball, non-regulated websites have used a marketing technique allowing them to appear on the searches of people looking to play on websites not listed on Spelpaus, Sweden’s self-exclusion registry.
Illegal Operators Continue Targeting Vulnerable Players
According to Rightlander, which reviewed the Swedish market in January 2021, illegal gambling websites have used specific keyword-targeting to make sure they reach vulnerable gamblers, an underhand affiliate strategy that regulators look down upon and sanction. A total of 98 websites have been suspended.
Some 30 websites allowed consumers to play online without the need to register accounts, potentially referring to crypto casinos that do not require traditional KYC and AML verifications in most cases.
At the time, Rightlander emphasized how easy it was to circumnavigate tough restrictions that local operators must uphold while illegitimate websites can target customers all the same.
Rightlander added that without properly addressing the issue of offshore websites, customers would remain vulnerable. Sweden’s next gambling review must focus on a successful way of curbing these websites from reaching at-risk gamblers if the measures imposed by Shekarabi last year are to make any sense at all.
The inquiry is headed by Gunnar Larsson, Director General of the Swedish Chamber of Commerce, and is expected to end in April.