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Why the New Swedish Gambling Act is a Double-Edged Sword

A monopoly, a grey area, illegal: these are some of the words people have often used to describe the state of gambling in Sweden. But after the government enforced a new act on January 1st this year, it became clear the country was headed in the right direction.

In the next three months, Sweden licensed over 120 online gambling businesses. The new bookmakers settled fast and made a combined £300 million by August. And while these figures are likely to continue skyrocketing, the new gambling act isn’t the game-changing laws everyone in Sweden hoped for.

What’s in the Act?

At its core, the new gambling act is designed to liberalize the gambling industry, protect vulnerable players, and steer it to the next level. That’s why lawmakers hurried the process of turning the proposal tabled in parliament in 2017 to law by July 2018.

Of course, there was also the issue of the government losing an amount equal to a third of its gambling revenues to overseas casinos. In a report tabled to parliament in 2017, lawmakers alleged Sweden lost £550,000 (SEK 6.7M) to foreign gambling companies. Instead, it collects an average of £1,900,000 (SEK 23.4M).

The result was to create a gambling act that encourages foreign bookmakers to acquire local licenses. But does it? The bill states the following:

  • A casino license permits a business to offer slots, bingo, poker, and other table games
  • A betting license allows an entity to provide sports betting, virtual sports, and lotteries
  • Companies can apply for a casino, betting or both licenses under one agreement
  • Gambling businesses pay 18% of their gross gaming revenues as tax
  • Casinos can’t advertise their services aggressively
  • They can’t accept underage players
  • The only types of bonuses casinos can offer are welcome bonuses. That means loyalty and VIP programs are not allowed.
  • Players must set daily, weekly and monthly deposits

Which Top Bookmakers have Swedish Licenses?

Over 100 sports betting sites have acquired licenses from the Swedish Gambling Authority since the start of this year. They include well-known companies like bet365, bet safe, and Nordic Bet. Bä features a more detailed guide for bookmakers with Swedish licenses. It also explains about their bonuses and what sets them apart from regular bookies.

These companies want a share of the ever-increasing gambling market in Sweden. Some of them acquired licenses to get on board with the Swedish government after years of accepting Swedish players illegally.

But nearly one year after the gambling to effect, online betting sites have realized it is not as progressive as they might have imagined. Here are the reasons why:

  • Constant Fines for Aggressive Marketing

The Swedish government has made it clear it doesn’t want gambling businesses to market their services aggressively multiple times. Earlier this year, the minister in charge of gambling, Ardalan Shekarabi (civil minister), directed companies to do ‘subtle marketing’ or face the consequences.

A few gambling sites that might have invested heavily in advertising ended up getting fined by the gambling authority. One of those establishments, Ninja Casino, ultimately shut down as it couldn’t cope with the fines.

  • Rules that Discourage Gambling

Sweden’s new gambling act has some outrageous regulations that could have adverse effects on both the gamblers and online bookies. For example, slot machines players can’t enjoy the games in peace. Instead, they are forced to have three-second breaks in between spins “for their safety.”

Players also need to set daily, weekly, and monthly deposit limits. The government hopes this rule will help reduce the number of people who run into debt while betting. Another ridiculous law limits casinos to giving out first deposit bonuses alone. Casinos can’t offer you reload bonuses, loyalty points, or operate a VIP program.

  • No Laws for Foreign Bookmakers

Despite the strict rules for players and locally licensed gambling sites, the new act says little about foreign bookmakers that accept Swedish players. That’s a bit surprising considering the law was designed to protect Swedish gamblers from unlicensed international businesses.

The act’s only attempt at protecting locally licensed casinos from unfair competition is that it authorizes banking companies to block payments to foreign unlicensed gambling sites. But as you probably know, players have numerous ways to around such restrictions.

The Search for Unlicensed Betting Platforms

Recent reports show there’s an increase in the number of online searches related to unlicensed Swedish casinos. For example, the words ‘utan licens,’ which translates to ‘casino without a license,’ were searched 6,600 times in August, up from 500 searches in January.

To be fair, most casino players in Sweden have been using overseas sites long before the new gambling act went into effect. But the fact that the new bill is full of rules that discourage gambling has been forcing players to look for better services in foreign countries.

Keywords of betting sites not licensed in Sweden have also been on the rise. Comparatively, foreign bookmakers that target Swedish players growing by the day. Some betting sites even go as far as to promise huge VIP bonuses and all the other bonuses prohibited by the new gambling act.

Besides bonuses, players also want to play on casino sites that don’t interrupt them as they cherish their favorite slot machines. And because all casinos in Sweden must enforce the three-second rule, the best alternative is to play on foreign sites.

Another reason for the increased search for casinos not regulated in Sweden relates to the government’s new self-exclusion program. It’s known as Spelpaus and operates in a near similar way to the UK’s GamStop. A player can opt to be excluded from all gambling sites.

But what happens if a player self-excludes for one year but regrets the decision after three months? Sweden casinos won’t accept him. So, the next logical move is to play on a gambling site licensed in Malta, the UK, or Curacao.

The Act’s Silver Lining

Although the new act has been hard on casinos and players, it’s a crucial development in Sweden’s gambling sector. It’s also a chance for sports organizations to capitalize on the sponsorship deals the rest of Europe has been earning for years.

Two of Sweden’s top football leagues, the Allsvenskan and Superettan, have already benefited from gambling sponsorships. Through a partnership with the Unibet brand, these leagues will benefit from a deal worth $97 million (SEK 900M). The contract will run for six years but could also be extended for another six years at a value of SEK 1.8 billion.

Besides football leagues, players like Zlatan Ibrahimovich have also been signing deals with bookmakers. Zlatan partnered with Bethard in2018 to become the bookmaker’s official brand ambassador. He also holds shares in the company.

To Conclude

The new Swedish gambling act came to change how things work. It was designed to promote a competitive gambling environment. It also hoped to protect players for compulsive betting, which is why it includes one too many rules.

Unfortunately, these rules pose a bigger issue than the problem they are meant to solve. For starters, denying players bonuses will encourage them to bet on foreign bookie sites. Interrupting their games as they play slots will also discourage them from using local casinos. The only way out is for the government is to be less aggressive and give players and casinos more freedom to do what they love.

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