The gambling industry in Sweden has continued to evolve over the past 25 years, transforming from a state-run business into a market that an increasing number of operators seek to enter. However, this transformation did not happen overnight, and the country had to make significant progress before its gambling industry began to flourish.
The gambling market is developing quickly, and interest in online gambling has grown even further, which has rendered the existing legislation irrelevant and made re-regulation necessary.
Yet, before the introduction of the new Gambling Act in 2019, the industry was somewhat disorganized. Until its passage, the market remained entirely in the hands of the state-owned monopoly.
In this article, we will examine the journey Sweden undertook to become a country with a well-developed and well-regulated gambling industry, so keep reading.
The State of Affairs Prior to 2019
Sweden has long been on the radar of foreign gaming operators, even more so after the legislative changes that took effect at the beginning of 2019, which explains the ensuing buzz.
The monopoly over the gambling industry lasted for quite some time, and it began in 1934 when the first private bookmaker was established. Needless to say, its operations were heavily regulated, and, more importantly, it was nationalized shortly after it was founded. Several years later, this nationalized bookmaker and a small-scale national lottery merged, resulting in the creation of Svenska Spel, a state-owned betting company that backed all forms of gambling for many years.
It is important to note that Svenska Spel was responsible for organizing lotteries, sports events, dog races, and operating gaming machines. The scope of the Horse Racing Totalizator (ATG), on the other hand, covered betting on horse races, whereas lotteries and bingo were organized by public-benefit organizations.
The two main pieces of legislation that ensured the industry would remain under state control were The Lotteries Act 1994 and The Casinos Act 1999.
Thanks to legislative changes enacted in 2002, Svenska Spel was allowed to start using digital platforms, which gave Swedes access to online scratch cards. A few years later, the range of available options broadened further when additional reforms allowed residents to play poker online.
Engagement among Swedes in such activities online rose sharply, and according to available data, in 2003 gaming via Svenska Spel reached 60%, generating well over SEK490 million.
Over the next few years, the government realized there was no way to prevent overseas operators from serving Swedish players, while pressure from the EU continued to mount.
Despite the legislative developments that allowed foreign operators to provide their services in the country, Sweden has retained its monopoly over a number of gambling activities. Along with slot machines and brick-and-mortar casinos, the state still controls bingo and lotteries, whether virtual or land-based.
How the Swedish Gambling Market Fared under the State Monopoly
After these sweeping changes to its gambling laws, Sweden has largely abandoned the state monopoly. One question remains though: how did the gambling industry perform before these game-changing legislative amendments?
Over the past two decades, the private gambling sector in the country has posted consistent growth. Available data show that the number of private companies operating in Sweden surpassed twenty almost ten years ago. In addition, the combined market capitalization of the fifteen companies listed on the stock exchange was close to SEK70 billion.
GGR of Sweden’s Regulated Market under the Monopoly
Regulated vs. Unregulated Market Performance prior Liberalization
Popularity of Online Gambling in Sweden Compared to Other EU Countries
GGR of Sweden’s Regulated Market under the Monopoly
The best way to show how the gambling industry performed under the state monopoly is to review a few key market figures, so we will focus on data released by the Gambling Authority.
First, let us look at operators with permits. According to the report published by the Gambling Authority of Sweden, in 2016 turnover totaled SEK46.716 million. For comparison, turnover in 2015 was SEK45.411 million. Gross gaming revenue for these two years stood at a little more than SEK17 million in 2016 and SEK16.716 million in 2015.
Available information shows that turnover per inhabitant was almost identical in both years, amounting to SEK4.867 and SEK4.610, respectively. Total GGR per inhabitant reached SEK1.714 in 2016 and SEK1.697 in 2015. Finally, gambling accounted for 2.34% and 2.39% of disposable income in those years.
For operators that served the Swedish market without a permit, GGR jumped from SEK4.380 million to SEK5.100 million. Total GGR per inhabitant also climbed, rising to SEK512 in 2016 from SEK445 the year before.
Back in 2016 lotteries, sports betting, numbers games, and horse race betting were the main growth drivers. Gross gaming revenue was SEK17.1 billion, about SEK4 million more than in 2015.
The operators’ market share is also worth noting. Svenska Spel and unlicensed operators were the most popular choices among Swedes. ATG and the National Lotteries ranked third and fourth, respectively. Casino Cosmopol, bingo, restaurant casinos, and municipal and regional lotteries brought up the rear.
| Market Share of the Operators 2016 |
| Svenska Spel | SEK7.821 million |
| Gaming Operators without Permits to Work in Sweden | SEK5.100 million |
| ATG | SEK4.021 million |
| National Lotteries | SEK3.574 million |
| Casino Cosmopol | SEK1.172 million |
| Bingo | SEK256 million |
| Restaurant Casinos | SEK210 million |
| Municipal and Regional Lotteries | SEK32 million |
These figures indicate that the then-current gambling legislation was starting to lose relevance, mainly because of the rapid growth of online gambling. This is hardly surprising given the efforts of gaming operators to move their operations onto new platforms. Lawmakers, for their part, have already recognized the growing need to modernize gambling laws in response to technological advances and constantly changing consumer behavior.
Regulated vs. Unregulated Market Performance prior Liberalization
Figures show that in 2015 overseas gaming operators controlled well over 50% of Sweden’s online gambling market. Since then demand for land-based gambling has steadily declined, and revenue from this segment has shrunk.
Before the market opened to foreign operators, the country’s gross gaming revenue was rising, which led the government to expect similar growth in 2020. In reality, however, industry growth was modest because gross gaming revenue increased by only 0.4% compared with 2019.
Regarding the revenue generated by different types of gambling activities, licensed online gambling accounted for the largest share. During the past year, regulated virtual casinos generated roughly SEK15.2 million. Slots and lotteries followed with about SEK5.5 million, while national lotteries and profit games contributed another SEK3.6 million.
| Year | Gross Gaming Revenue Operators with Permit |
| 2013 | SEK17.249 million |
| 2014 | SEK16.447 million |
| 2015 | SEK16.717 million |
| 2016 | SEK17.157 million |
| 2017 | SEK17.221 million |
| 2018 | SEK23.4 million |
| 2019 | SEK24.8 million |
As already mentioned, the share of Swedes who chose to play with unlicensed operators kept rising for several consecutive years. This was not the only form of illegal gambling gaining momentum, as unlicensed gaming machines and card games, especially poker, also attracted growing attention.
Despite efforts by licensed operators to serve Swedish players, many residents still turn to unregulated betting sites because of a perceived lack of sustainable and credible offers. The government expects demand for such sites to lose momentum as the regulated market expands and market absorption improves.
Since 2012 gross gaming revenue generated by operators without approval has trended upward, a development attributed to the limited range of legal options available to gambling enthusiasts at that time.
| Year | Gross Gaming Revenue Operators without a Permit |
| 2012 | SEK3.241 million |
| 2013 | SEK3.593 million |
| 2014 | SEK4.123 million |
| 2015 | SEK4.380 million |
| 2016 | SEK4.826 million |
| 2017 | SEK5.534 million |
Although it is difficult to determine exactly how many Swedes use unregulated gaming operators, experts estimate that players wagered between SEK613 and SEK713 million in the last quarter alone with operators outside the licensing system.
Experts reported that in 2018 the country’s gambling industry, including the unregulated segment, continued to grow. Interestingly, fewer residents took part in gambling, but those who did were inclined to spend more money. In addition, changes in consumer behavior became even more pronounced, with a clear shift toward devices with smaller screens.
The downward trend in land-based gambling continued. Figures for 2016 show that interest in such activities fell by about 3%. The growing focus on online gambling became more evident, and surveys indicate its popularity rose by around 14%.
The share of Swedes who preferred to place bets via mobile devices also increased; it reached 25%, coming very close to the proportion of people who preferred desktop betting (29%).
Popularity of Online Gambling in Sweden Compared to Other EU Countries
Gambling activity is gaining momentum in most European countries, so the best way to understand Sweden’s position is to compare it with the rest of the member states.
When the gross gaming revenue of casinos across the EU was compared for 2016, Switzerland ranked third after France and Great Britain, whose GGR reached €2.314 million and €1.602 million, respectively. Switzerland’s gross gaming revenue stood at €661 million.
Measured in euros, Sweden trailed behind countries such as Spain, Austria, Italy, Greece, and Portugal. Much like many other European nations, Sweden has also seen rising participation in online forms of gambling. Data show that in 2019 Sweden placed seventh when gross gaming revenue was expressed as a share of national GDP.
At that time Greece led the way with a GGR equal to 1.16% of GDP. Italy followed closely at 1.02%, while Portugal and Finland occupied the next two spots with 0.89% and 0.85%, respectively.
After the legislative changes that liberalized the market, online gambling started to play an even more prominent role in the overall industry. In fact, Sweden led Europe in 2019: online gambling accounted for almost 59% of its entire gambling market.
Denmark was a close second with 54.6%. The UK and Finland ranked third and fourth, with online market shares of 45.3% and 42.6%, respectively. Italy was at the bottom of the table, as this vertical represented just over 10% of its gambling industry.
Reasons for Market Liberalization
There are several factors that led to the opening of the Swedish gaming market, and the biggest game changers were the growing pressure from the European Union, the intensifying efforts of operators to enter the market, and the changing preferences of players.
While examining how Sweden’s legislative framework has changed, the first thing to consider is the role the EU has played. In 2004, the country received a letter of formal notice stating that the limited betting opportunities offered by Svenska Spel should be introduced in a consistent and systematic fashion.
The following year, Ladbrokes applied for permission to operate in the country, but the Swedish Supreme Administrative Court rejected the application.
The Swedish government continued to maintain its tough stance on liberalizing the market. In 2006, the European Commission requested information from Sweden and several other countries, including the Netherlands, Hungary, Germany, Italy, Finland, and Denmark, regarding the limited offering of sports betting. Although the Commission did not directly address the state monopoly, it expressed concerns that the national measures breached EU law, specifically Article 49 of the Treaty.
The following year, the Commission asked France and Sweden to adjust their legislation to make it compatible with EU law. Contrary to expectations, the Swedish government refused to enact the required changes, keeping its monopoly on the gambling market and blocking overseas operators.
Over the next few years, a growing number of lawmakers expressed support for making the gaming industry more competitive. The first steps toward an open-door licensing system that foreign operators could enter were announced in 2008.
Pressure from the European Commission continued, and in 2012 Sweden was asked to adapt its legislation concerning poker and online betting. The Commission was not satisfied with the amendments, which led to Sweden being referred to the Court of Justice of the EU. In 2015, the Swedish government continued efforts to scrap the monopoly and outlined its own licensing system.
According to the proposal, land-based horse racing, sports betting, bingo, poker, and online casinos offered by foreign operators would be made available to Swedes. Although domestic courts initially upheld the state monopoly, the crucial legislative amendments ultimately took effect at the beginning of 2019.
Improved customer protection also played a role in liberalizing the market. Before the industry opened, Swedes often played at foreign betting sites where safety standards and player protections were uncertain. With some overseas operators, the conditions were unclear, exposing gamblers to greater risk.
As already mentioned, the recent legislative changes did not remove exclusive state control over all forms of gambling, which in practice limits the flow of money to overseas operators. Tax revenue is another factor to consider when discussing the reasons behind Sweden’s gambling market liberalization.
Regulations Under the Swedish Gambling Act of 2019
The rise of online gambling, its growing popularity, and pressure from the EU gradually eroded the state monopoly over the industry.
Swedes are enthusiastic gamblers, and data show that about 60% of the country’s residents took part in gambling during the past year. The industry is expanding rapidly thanks not only to changing consumer behavior and advancing technology but, above all, to recent legal initiatives.
This expansion would likely not have occurred without the Gambling Act, which came into force on January 1, 2019. The market was re-regulated after the Riksdag, Sweden’s national legislature, approved amendments that dismantled the state monopoly and allowed foreign operators to apply for licenses and serve Swedish players. These 2018 amendments placed greater emphasis on customer protection and effective management of risky gambling.
The reform enjoyed near unanimous support among lawmakers and, as a result, the market became far more competitive as foreign operators entered, giving Swedes a much broader choice of regulated options. The rules introduced at the start of 2019 aim to exclude unregulated operators and ensure adequate oversight of the market.
The Gambling Authority also deserves attention because it is charged with keeping the gambling market healthy and safe. Under the new legislation, responsibility for issuing licenses shifted from the government to the Gambling Authority.
Licensed operators must take every measure to prevent excessive gambling and therefore need to monitor user behavior.
The legislative changes reshaped Sweden’s gambling market, which is now divided into several segments, including online gambling and betting, gambling for public benefit such as bingo and lotteries, token machines, and land-based casinos.
The legal framework rests on multiple statutes, most notably the Gambling Act, Money Laundering Act, and Marketing Act, among others.
Several agencies and organizations are involved in the industry, including the Gambling Authority, the Ministry of Finance, the Swedish Consumer Agency, and the Swedish Public Health Agency.
Taxes and Fees
Restriction on Gambling Advertisements
Measures Against Unauthorized Gambling Businesses
Taxes and Fees
Under the new rules, gaming operators that have obtained approval from the Gambling Authority are subject to a tax of 18% on their profit. The tax is levied on the operator’s revenue for each month, which constitutes one tax period. Gambling carried out for non-profit purposes remains tax-exempt, just as it was before the legislative amendments.
When applying for a license from the Gambling Authority of Sweden, gaming operators must also pay various fees that depend on the services they intend to offer.
| License Type | Fee |
| License for Bingo | SEK30,000 |
| License for Commercial Online Gambling | SEK40,000 |
| License for Betting | SEK40,000 |
| License for Casino Games | SEK70,000 |
| License for State Lottery | Between SEK5,000 and SEK150,00 |
| Card Game Tournaments | Between SEK4,000 and SEK25,000 |
An annual supervisory fee is also charged, and its value is determined by gross gaming revenue. All license holders must pay between SEK30,000 and SEK500,000, depending on the number of available games and overall turnover. The highest supervisory fee applies when the operator’s turnover exceeds SEK500 million. A fixed fee of SEK450,000 is due during the first year after a license is granted by the Gambling Authority.
Restriction on Gambling Advertisements
Several EU member states have already introduced bans on gambling sponsorship and advertising, and Sweden has followed suit. In 2019 lawmakers announced plans to tighten control over advertising for virtual casinos and other forms of gambling after observing a sharp increase in problem gambling.
Measures Against Unauthorized Gambling Businesses
Sweden is among the countries working to strengthen customer protection, and it goes the extra mile to shield its market from unregulated overseas operators.
To that end, the Gambling Authority has introduced several measures designed to protect players. First, a pop-up message must warn users when they land on a betting site that operates without the required license.
The Authority has also called for the creation of a national registry that lists the deposit limits of every license holder. In addition, it advocates the use of payment-blocking technology against unlicensed operators.
Liberalization Impact on Sweden’s Online Gambling Industry
As in many other countries, gambling is becoming increasingly accessible to residents of Sweden, largely thanks to operators’ efforts to make their services available across all platforms. Although the Swedish gambling market was liberalized more than two years ago, the pieces have yet to fall into place. The COVID-19 outbreak has actually intensified existing challenges related to unlicensed gambling and player protection.
The situation prompted lawmakers to approve a set of temporary rules aimed at tightening control over virtual casinos and enhancing player protection. To reduce the harm caused by excessive gambling, the government introduced rules under which players may claim only the bonus offered on their first deposit, and, most importantly, the bonus amount cannot exceed SEK100.
Foreign operators were understandably unhappy with the crackdown on virtual casinos and argued that the measures were designed to bolster ATG and Svenska Spel. Yet, contrary to their expectations, revenues have continued to rise even after the limits were introduced.
To mitigate the negative effects of excessive gambling the new measures also impose a mandatory weekly deposit and loss cap of SEK5,000. Players must set time limits for their betting sessions. Operators fear that the temporary measures will remain in place, ultimately strengthening the position of state-run companies and allowing them to dominate the industry.
Experts worry that the restrictions could have the opposite effect, increasing the appeal of the black market among vulnerable individuals.
The Swedish Gambling Authority reported that around 59,000 people used the self-exclusion scheme in 2020. That number keeps growing and has already exceeded 61,000, marking an increase of about 6%.
How the Industry Fares Under The New Regulations
The Increased Player Satisfaction
How the Industry Fares Under The New Regulations
Figures released by the Gambling Authority show that Swedes wagered a total of SEK24.7 billion in 2020, and this figure covers only betting companies that hold a license. The per capita stake was SEK3,009, a 0.4% decrease compared with 2019.
Betting on horse racing recorded a notable increase, especially in Q3. According to ATG’s report for the year, revenue rose by 18%, or roughly SEK1.38 billion. Although ATG also operates an online segment, the main growth driver was horse-race betting (17%, or SEK1.19 billion), accounting for about 88% of the operator’s revenue.
The COVID-19 pandemic caused a sharp decline in the popularity of certain forms of gambling, most notably restaurant casinos.
Currently, the Gaming Commission has granted 70 active licenses, while the number of fully licensed betting sites is around 270.
The Increased Player Satisfaction
Not only has Swedes’ engagement in various forms of gambling increased since the market was liberalized, but their satisfaction with these activities has risen as well. According to available data, the national satisfaction index climbed to 64% in 2020. This represents a substantial increase from the 57.9% recorded a year earlier. Similar surveys have been conducted since 2017, and last year’s rise was the largest to date.
Most experts attribute the higher satisfaction levels to the opening of the gambling market and describe the reform as a success that will continue to bear fruit in the coming years.
The survey results also show that the confidence gap is narrowing because trust in the industry has grown. Nevertheless, non-gamblers remain skeptical, as only about 20% believe that the Gambling Authority and operators care about gambling enthusiasts.
It is somewhat troubling that the share of Swedes who are familiar with the country’s gambling legislation is very small, as is the share who know how to verify whether an operator’s license is valid.
