Sweden held a general election on Sunday, September 11 to elect members to the Riksdag, with these members soon welcoming a new government.
Gambling Regulation after the Election
On the topic of gambling regulation, the election could impact three major areas, according to Gustaf Hoffstedt, the secretary general of Swedish online gambling association Branscheforenigen för Onlinespel (BOS).
In an interview with Pierre Lindh on the iGaming NEXT podcast, Hoffstedt said these three could become very real possibilities:
- partial privatization of state-owned operator Svenska Spel
- the likelihood of increased marketing restrictions for licensed operators, and
- a potential liberalization of the highly restricted bonusing system
Hoffstedt said: "Svenska Spel is operating on the market that is still under a monopoly and no political party really suggests privatizing that part. However, it is also operating on the competitive market, against competitors like bet365 and Betsson.
The state is tempted to also be an aggressive operator on the field, so to speak. It's usually not a good idea that the player and the judge are the same person.
The suggestion from the Moderate Party and the Sweden Democrats is to privatize that part of Svenska Spel, and that is obviously a huge bite of the Swedish gambling market.
I would welcome such a development, and it is obviously very early still and gambling regulation and possible privatizations will certainly not be on the top agenda for the potential Prime Minister Ulf Kristersson these coming weeks. But finally, when a government is formed, I do believe that this topic will be highlighted."
Hoffstedt explained that his opposition to monopoly and state-owned gambling operations in Sweden is a moral one.
"I believe that the state should be the rule setter, it should set rules that individuals and companies are obliged to obey, they have to comply with those rules.
But in this case, at least in Sweden, but also in many other jurisdictions, the state is tempted to also be an aggressive operator on the field, so to speak. And as you know, it's usually not a good idea that the player and the judge are the same person - in a football match, for example."
BOS deems it would therefore be a positive development for the gambling industry to privatize the commercial side of Svenska Spel, he said.
When it comes to marketing restrictions, Hoffstedt said the outgoing Social Democrat government has recently submitted a bill to Swedish parliament proposing an increased regulation on advertising for licensed gambling operators.
The Moderate Party has recommended to drop the bill, but it may still be considered under Sweden's new government. If it pushes through, this could mean more harsh restrictions will be introduced for the gambling industry.
However, Hoffstedt believes the bill will "have a hard time" finding support in the new Swedish parliament, saying that BOS will support those MPs who are hesitant to move the bill forward, "It is obviously a core value for the licensing system that licensed operators can market themselves and their products."
One of the main arguments for allowing gambling marketing by licensed operators is to secure high channelization rates in the regulated market.
In Sweden, a major obstacle to that so far has been the imposition of tight restrictions on bonus offers, where only one welcome bonus upon sign-up is allowed. This resulted to many customers searching for more generous promotions on the websites of offshore operators, which are often unsafe to play at.
Liberalization of the Bonusing System
Hoffstedt explained: "No politician really wants to be outspoken when it comes to liberalization of the bonusing system. But at the same time it is obvious that we pay an extremely high price with the harsh regulation that we have today. Namely, that a lot of the Swedish online gambling customers prefer the unlicensed offer out there.
Every fourth Swedish kronor, when it comes to online casino, actually leaks out of the licensing system. And the Moderate Party [when reacting to the bill proposing increased marketing restrictions, also suggested] at least minor liberalizations when it comes to the strict prohibition on loyalty bonuses for online casino. Obviously, we support that suggestion as well."
Magdalena Andersson, Sweden's Social Democrat Prime Minister, will officially step down from her post on September 15, passing the power over to a four-party right-wing coalition.
Even if Andersson's Social Democrats still emerged as the single biggest party after Sunday's vote, the other left-wing parties did not have a majority of seats overall.
The Sweden Democrats won the second largest share of the vote, and will now aim to form a government with the conservative Moderates, Christian Democrats and Liberals, who between them secured a slim three-seat majority, with 176 seats to 173.
Initially they will be tasked with creating a new government, so it is highly unlikely that the country's gambling regulation would be at the top of their priority list.