The gambling market in Sweden grew by 2.8% year-on-year in the first quarter of 2018 to reach $631.9 million in gross revenue, according to the most recent figures posted by Lotteriinspektionen, the country’s gambling regulator.

The online gambling market in Sweden comprised nearly half of all first quarter revenue, with online casino games, including table games, specialty games, keno and slots as well as sports betting pulling down $317 million, a solid 16% growth in year-on-year online gaming revenue.

At the same time, the land based, brick and mortar casino market in Sweden shrunk by 8% over the first quarter last year, a clear indication that players are moving to online gambling over Sweden’s traditional land-based casino monopolies.

A point of frustration for the state, unlicensed online casino operators targeting Swedish players accounted for the single largest share of total online gambling revenue according to Lotteriinspektionen, picking up 54% of the total online gambling market in the country.

New gambling law expected

The surge in unlicensed online operators has been a sore point for Swedish authorities, who now aim to pass through a new gambling law to confront the issue and maintain a piece of the pie. In light of sustained growth in the online gambling market, the new law, as proposed by the government, looks to ditch the existing monopoly system in Sweden and open the market to foreign operators via a licensing system.

As evidenced by their growing market share, foreign operators have increasingly been targeting the domestic Swedish market, which has long relied on a monopoly system run by Svenska Spel.

Local monopolies see Q1 growth

Svenska Spel also saw slight year-on-year growth in the first quarter of 2018, pulling in some 23.4% of the market over 21.7% of the market for the same period last year, up 1.7%.

Other monopoly players such as ATG, which maintains the country’s horseracing franchise, Folkspel, who is in charge of the state-run bingo games and Svenska Postkodföreningen, who oversees the state-run lottery made up the 22.6% remaining share of the local online gambling market.

Legal details and regulatory oversight

The new law is largely expected to pass with out much resistance and is set to come into force in January 2019. A licensing regime would be introduced for non-state-owned monopoly operators that would require them to pay an 18% tax on revenue from their Swedish operations to comply with the terms of their license.

The licenses will be issued by gaming regulator Lotteriinspektionen, who expects to start accepting applications as soon as August of this year in the run up to implementing the new law. Foreign operators targeting the Swedish market without a license are likely to have their IP addresses targeted by local Swedish ISP, to who Lotteriinspektionen will issue a list of unlicensed operators.

The law itself, which is currently awaiting a vote in the Swedish legislature, will contain several important provisions, regulating licensing, taxation and player protection in line with new EU rules on personal data protection that will come into effect next month.

Bonuses offered to Swedish players will also be restricted under the new law, with bonus offers being limited to one-off first time offers only. Another provision also requires operators to require players to set deposit limits before they start to play.

At the same time Lotteriinspektionen will be given the power to require all ISPs to provide a warning message in Swedish that players are now entering unlicensed sites. Furthermore, in a move to limit black market operations, the law looks to require Swedish payment service providers to block payments from unlicensed online casinos.

The total Swedish gambling market is estimated to be worth approximately $1.8 billion per year in the country of 9.9 million.

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Richard Holmes was born in Tampa, Florida and studied computer science at Pensacola Christian College in Pensacola Florida. A devout Baptist, volunteer Sunday School teacher and online gaming fan, Richard works as a part-time systems administrator at Baptist Hospital and part-time professional blogger specializing in statistics, probability and computer science issues. He is an ardent believer in the future of artificial intelligence as a tool for transforming human society for the better, particularly in the area of health care and modern medicine. A chess player, and competitive online gamer Richard actively participates on online gaming tournaments in his free time.