The gambling industry of Sweden has not ceased to evolve during the past 25 years, and it went from a state-run business into a market more and more operators are looking to penetrate. Yet, this did not happen overnight, and the country has gone a long way until its gambling industry started to flourish.
The gambling market is developing quickly, and the interest in online gambling is even more heightened, which made the available legislation irrelevant and the re-regulation much-needed.
Yet, prior to the introduction of the new Gambling Act back in 2019, the industry was somewhat messy. Up until its passage, the market was entirely in the hands of the state-owned monopoly.
In this article, we will focus on the way Sweden has gone until it turns into a country with a well-developed and well-regulated gambling industry, so just continue reading.
The State of Affairs Prior to 2019
Sweden has long been on the radar of foreign gaming operators, and even more so after the legislative changes that took into effect at the beginning of 2019, which goes to show why they created such a buzz.
The monopoly over the gambling industry has lasted for quite some time, and it all started back in 1934 when the first private bookmaker was established. Needless to say, its operations were subject to tough regulations and what is more important to point out is that it was nationalized shortly after it saw the light of the day. After several years, this nationalized bookmaker and a small-scale national lottery merged, which resulted in the creation of Svenska Spel, a state-owned betting company, which backed all forms of gambling for many years.
Something essential to note is that the responsibilities of Svenska Spel included the organization of lotteries, sports events, dog races, and the operation of gaming machines. The scope of the operations of the Horse Racing Totalizator (ATG), on the other hand, included betting on horse races, while the organization of lotteries and bingo was in the hands of public benefit organizations.
The two main pieces of legislation that guaranteed that the industry will remain under the control of the country are The Lotteries Act 1994 and The Casinos Act 1999.
Thanks to some legislative changes that were enacted back in 2002, Svenska Spel was allowed to start using digital platforms, which gave Swedes access to online scratchcards. A few years later, the range of the available options was further broadened, as the enactment of some law reforms made it possible for residents of the country to play poker online.
The engagement of Swedes in such activities over the Internet was heavily on the rise, and according to the available data, back in 2003, gaming on the channel of Svenska Spel hit 60%, thus generating well over SEK490 million.
In the next few years, the government figured out that there is no way to prevent overseas operators from accommodating Swedes, while the tension from the EU continued to grow.
In spite of the legislative developments that allowed foreign operators to provide their services in the country, it should be pointed out that Sweden has retained its monopoly on a number of gambling activities. Along with slot machines and brick-and-mortar casinos, the state still keeps its sway over bingo, and lotteries, no matter whether it comes to their virtual or land-based form.
How the Swedish Gambling Market Fared under the State Monopoly
After the passage of these significant changes in its gambling laws, Sweden has largely scrapped the state monopoly. The question one might ask, however, is how the gambling industry performed prior to these game-changing legislative amendments.
What is interesting to point out is that during the past two decades, the private gambling industry in the country has seen continued growth, and under the available data, the number of such companies that operate there has exceeded twenty almost a decade ago. Besides, the share of the fifteen companies that are added to the stock exchange alone was valued at almost 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 illustrate how the gambling industry has fared under the state monopoly is to take a look at some key figures regarding the market, and to this end, we will focus on the data released by the Gambling Authority.
Let us first focus on the released information about operators with permits. According to the report released by the Gambling Authority of Sweden, back in 2016, the turnover ran into SEK46.716 million. For comparison, the turnover for 2015 was worth SEK45.411 million. As for the gross gaming revenue for these two years, it was slightly more than SEK17 million in 2016, and SEK16.716 million in the previous year.
From the available information, it becomes apparent that the turnover per inhabitant was roughly the same during these two years as it amounted to SEK4.867 and SEK4.610, respectively. As for the total GGR per inhabitant, back in 2016, it ran into SEK1.714, while in 2015, it ran into SEK1.697. Lastly, the percentage of disposable income during these two years was 2.34% and 2.39%, respectively.
As for the operators that catered to the Swedish market without the necessary permit, the GGR has jumped from SEK4.380 million to SEK5.100 million. The total GGB per inhabitant has expanded, thus reaching SEK512 in 2016, from SEK445 in the previous year.
It turns out that back in 2016, lotteries, sports betting, and numbers games, and horse race betting were the biggest growth drivers. Back then, the gross gaming revenue was SEK17.1 billion, and just for comparison, this was an increase of around SEK4 million with the values from 2015.
The market share of the operators also deserves attention as Svenska Spel and operators that offered their services without a permit were the options Swedes were most inclined to opt for. The AGT and the National Lotteries took third and fourth places, respectively. Casino Cosmopol, bingo, restaurant casinos, and municipal and regional lotteries were the lowest-ranking.
| 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 go to point out that the then active gambling-related legislation has started to lose its relevance, mainly because of the fast-paced development of online gambling. This is not surprising at all, considering the massive efforts of gaming operators to carry their operations over new platforms. Law-makers, on the other hand, have already awakened to the growing need for the modernization of the gambling laws not only because of technological development but also because of the constantly changing consumer behavior.
Regulated vs. Unregulated Market Performance prior Liberalization
Figures indicate that back in 2015, overseas gaming operators held well over 50% of the online gambling market of the country. In addition to this, since that time onwards, there has been a growing trend of a decrease in the demand for land-based gambling, and the shrinkage of the revenues this segment alone has produced.
Prior to the opening of the market for foreign operators, there has been an increase in the gross gaming revenue of the country, which made the government expect to see the same also in 2020. Yet, ultimately, the growth of the industry is exceptionally humble as the gross gaming revenues have increased by just 0.4% in comparison with 2019.
When it comes to the revenues produced by the different gambling type activities, licensed online gambling held the most considerable cut. Figures point out in the past year, regulated virtual casinos have raised approximately SEK15.2 million. Slots and lotteries were next in line, holding around SEK5.5 million. They were followed by national lotteries and profit games that have contributed with 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 mentioned already, the share of Swedes who preferred to use the services of unlicensed operators was steadily on the rise, and this tendency has repeated for several years. What is interesting to point out is that this was not the only form of illegal gambling, which started to gain momentum in the country as gaming machines and card games, poker, in particular, are also offered without a permit and turn more and more heads.
In spite of the efforts of operators that have obtained the needed seals of approval in order to accommodate Swedes, residents of the country point out that they turn to unregulated betting sites mainly because of the lack of sustainable and credible offers. Yet, according to the expectations of the government, the demand for such betting sites will start lowering pace because of the increase in the regulated market, as well as the improved market absorption.
From 2012 onwards, a trend of increase is observed in the gross gaming revenue of operators that have worked without the needed approval, which can be ascribed to the smaller range of options gambling enthusiasts were given back then.
| 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 hard to determine the number of Swedes who prefer to use the services of unregulated gaming operators, experts have estimated that the amount they have staked while using the services of operators that are not within the licensing system of the country is somewhere between SEK613 and SEK713 million for the last quarter alone.
Experts have reported that back in 2018, the gambling industry of the country, the unregulated one, included, continued to see steady growth. Something interesting to point out is that residents of the country were less likely to engage in such activities, but the ones who took part in the different forms of gambling were inclined to spent more money. Besides, the changes in consumer behavior started to become even more marked, and the orientation to devices with smaller screens became exceptionally pronounced.
There was a growing trend of a decrease in the popularity of land-based gambling, and figures for 2016 show that the decrease in the interest in such activities was around 3%. The growing focus on online gambling started to become more discernible, and surveys show that its popularity escalated with around 14%.
The share of Swedes who preferred to place their bets through their handheld devices was also on the rise, and it jumped to 25%, thus getting exceptionally close to the share of people who preferred to place their bets through their desktop device (29%).
Popularity of Online Gambling in Sweden Compared to Other EU Countries
It turns out that gambling activities are picking up steam in most European countries, and therefore, the best way to figure out how Sweden performs is to draw a parallel between its industry and the rest of the member states.
When comparing the gross gaming revenue of the casinos in the countries in the EU for 2016, Switzerland took third place after France and Great Britain where the GGR was €2.314 million and €1.602 million, respectively. As for Switzerland, its gross gaming revenue was €661 million.
When the revenues are measured in euros, however, Sweden was outperformed by countries like Spain, Austria, Italy, Greece, and Portugal. Much like with most other European countries, Sweden also sees growing participation in online gambling forms. According to the available data, back in 2019, Sweden ranked seventh when the gross gaming revenue as a share of the GDP of the countries is taken into account.
Back then, Greece was the country, which took the lead as its gross gaming revenue was 1.16%. Italy was a close second with 1.02%, while Portugal and Finland took the third and fourth positions with 0.89% and 0.85%, respectively.
After the legislative changes that led to the liberalization of the market, this vertical started to play an even more significant role when it comes to the total share of the gambling industry. In fact, Sweden held the lead in 2019 as when compared with the rest of the European countries, its online gambling market held almost 59%of the whole industry.
Apparently, Denmark was a close second as the share of its online gambling industry was 54.6%. The UK and Finland ranked third and fourth, and the online gambling market share was 45.3% and 42.6%, respectively. Italy was at the bottom of the table as this vertical held slightly over 10% of the 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 penetrate the market, and the changing preferences of players.
While exploring the way the legislative framework of Sweden has changed, the first thing to take into account is the role the EU has played, and back in 2004, the country received a letter of formal notice that the limited betting opportunities the Svenska Spel offers should be introduced in a consistent and systematic fashion.
During the next year, Ladbrokes pushed for permission to start working in the country, but the efforts of the operator were averted as the Swedish Supreme Administrative Court rejected its application.
The Swedish government continued to maintain its tough stance on the liberalization of the market. Back 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 betting on sports. In spite of the fact that the Commission did not address the state monopoly in the country, it raised its concerns that the national measures in the country breach the EU laws, and more specifically, Article 49 of the Treaty.
In the next year, the Commission requested France and Sweden to adjust their legislation in order to make it compatible with the laws and regulations in the EU. Contrary to what many people expected, the Swedish government refused to pass the needed legislative changes and lift its monopoly on the gambling market and open it for overseas operators.
With this in mind, in the next few years, an ever-growing number of lawmakers started to express their approval of the idea to make the gaming industry more competitive. The first steps towards an open-door licensing system that foreign operators will be able to penetrate were made in 2008 when a set of measures were announced.
The pressure from the European Commission continued in the next years, and in 2012, Sweden was asked to adapt its legislation when it comes to poker and online betting. The Commission was not satisfied with the legal amendments, which resulted in the referral of Sweden to the Court of Justice of the EU. Back in 2015, the Swedish government went on with the steps needed to scrap the monopoly and came up with ideas about its own licensing system.
According to the proposal, land-based horse racing, sports betting, bingo, poker, and online casinos that are offered by foreign operators will be made available to Swedes. Although the courts within the country went to uphold the state monopoly on the gambling industry, the all-important legislative amendments ultimately took into effect at the beginning of 2019.
The increase in customer protection has also played a role in terms of the liberalization of the market. Prior to the opening of the industry, Swedes were used to playing at foreign betting sites where they cannot have the full peace of mind that the safety levels and player protection are up to scratch. With some overseas operators, the conditions are not that clear-cut, for which reason gambling enthusiasts are exposed to greater risk.
As it was already mentioned, the legislative changes that were put into effect a few years ago did not lift the exclusive state control of all forms of gambling, which in practice limits the money flow to overseas operators. The gambling taxes are another to consider while discussing the reasons for the liberalization of the gambling market of Sweden.
Regulations Under the Swedish Gambling Act of 2019
Obviously, the rise of online gambling and its heightened popularity, together with the pressure from the EU is what eroded the state monopoly over the industry.
It turns out that Swedes are heavily into gambling, and data shows that around 60% of the residents of the country have engaged in such activities during the last year. The gambling industry of the country is expanding rapidly, and this is to be ascribed not only to the behavior of customers and technologies but above all, to the legal initiatives.
As likely as not, this would not have been the case without the Gambling Act, which entered into force on the 1 of January 2019. The market was re-regulated after Riksdag, which is the national legislature of Sweden, gave the nod to legislative changes that scrap the state monopoly system and make it possible for foreign operators to apply for a license and accommodate Swedes. Under these legislative changes that were hammered out in 2018, greater stress was put on customer protection and effective dealing with risky gambling.
What is interesting to point out is that this law reform was almost uniformly accepted by lawmakers, and thanks to it, the market became much more exposed to competition as foreign operators, thus giving Swedes a much wider choice of regulated options to select from. The aim of the set of rules that were introduced at the beginning of 2019 was to exclude gaming operators that are not properly regulated and to guarantee that the market will get enough oversight.
The role of the Gambling Authority of the country should also be given due attention as it should maintain the gambling market healthy and safe. It is important to note that under the legislative changes, the government of the country is no longer responsible for the issuance of licenses, and this responsibility is delegated to the Gambling Authority.
Gambling operators that have got a stamp of approval are required to take all measures to prevent excessive gaming and to this end, need to keep track of the behavior of their users.
These legislative changes have brought about the transformation of the gambling market of Sweden as now, it is divided into several parts, including online gambling and betting, gambling with public benefit, which is the case with bingo and lotteries, token machines, and brick-and-mortar casinos.
In this relation, it should be mentioned that the legal framework of the country is based on multiple statutes, more specifically, the Gambling Act, Money Laundering Act, and Marketing Act, among others.
There are several agencies and organizations that are involved in the gambling industry, and these include 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 got the approval of the Gambling Authority are facing a fee of 18% on their profit. The tax is imposed on the revenues of the operator for one month, which is considered one taxation period. It should be pointed out, however, that gambling for non-profit purposes does not incur a tax, which was so also prior to the legislative amendments.
While applying for a stamp of approval from the Gambling Authority of Sweden, gaming operators will face taxes and compulsory fees that will be based on the services they 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 the gross gaming revenue. All license holders will be required to pay fees that range between SEK30,000 and SEK500,000 based on the number of available games, as well as the turnover. The most considerable supervisory fee is charged when the turnover of the the operator has gone over SEK500 million. A vital thing to consider is that a fixed fee of SEK450,000 will be applied during the first year after the operator has earned a license from the Gambling Authority.
Restriction on Gambling Advertisements
So far, multiple member states have introduced rules to ban sponsorship and advertising, and unsurprisingly, Sweden also chose to follow suit. Lawmakers announced their intentions to tighten the state grip over advertisements of virtual casinos and other forms of gambling back in 2019 as a result of the sharp increase in the number of addicts.
Measures Against Unauthorized Gambling Businesses
Sweden is indeed among the countries that are looking to strengthen customer protection, and it goes to extra mile to protect its market from overseas operators that are not properly regulated.
To this end, the Gambling Authority has focused on several measures to ensure that gambling enthusiasts will be protected while placing their bets. First off, a pop-up message should appear in order to warn players if they happen to land at a betting site, which operates without the needed seal of approval.
The Authority has also called for the creation of a national registry in which the deposit limits of each and every license holder are featured. Another measure the Authority sees fit is the implementation of payment-blocking technology when the operator is unregulated.
Liberalization Impact on Sweden’s Online Gambling Industry
Much like in other countries around the globe, gambling is becoming more and more available to residents of Sweden, all the more so thanks to the efforts of gaming operators to make their services available in all possible environments. In spite of the fact that the liberalization of the gambling market of Sweden came about more than two years ago, it can safely be said that the pieces are yet to fall into their places. In fact, the Covid outbreak intensified the issues the gambling industry was already facing in terms of unlicensed gambling and player protection.
The situation forced lawmakers to approve a set of temporary rules that aim at tightening the control over virtual casinos in order to enhance the protection of players. In order to reduce the harm of excessive engagement in gambling activities, the government has introduced new rules under which players will not be allowed to take other special deals than the one given on the first deposit occasion, and most importantly, the offered amount cannot exceed SEK100.
Needless to say, foreign operators were not comfortable with the crackdown on virtual casinos, and they voiced concerns that these measures are tailored to strengthen the position of ATG and Svenska Spel. Yet, contrary to what most foreign operators expected, their revenues are still on the rise even after the implementation of the above-mentioned limits.
The government is indeed looking to counteract the negative impact excessive gambling has as under the new measures, there is a mandatory weekly deposit and loss cap of SEK5.000. Besides, gambling enthusiasts will be prompted to choose time limits for their betting session. Naturally, operators have expressed their concerns that the temporary measures will not be lifted, and ultimately, the state operators will strengthen their positions and will dominate the industry.
Experts, on the other hand, are worried that these measures will have the opposite effect and will add up to the attractiveness of the black market to vulnerable individuals.
The Swedish Gambling Authority has reported that the number of people who have taken advantage of the self-exclusion scheme was around 59 000 back in 2020. This year, their number continues to grow, and it has already gone over 61 000, thus marking an increase of around 6%.
How the Industry Fares Under The New Regulations
The Increased Player Satisfaction
How the Industry Fares Under The New Regulations
According to the figures released by the Gambling Authority, the total amount Swedes have gambled back in 2020 runs into SEK24.7 billion, and this applies only to the betting companies that have obtained a license. As for the amount staked per person, it is SEK3.009, which is a 0.4% drop when compared to the figures for 2019.
What is worth mentioning is that betting on horse racing has seen a marked increase, and even more so in Q3. According to the report of the ATG for the past year, its revenues have soared by 18% or around SEK1.38 billion. What is interesting to point out is that its offerings also include an online segment, but the biggest growth driver was betting on horse racing in particular (17% or SEK1.19 billion), holding around 88% of the operator revenues.
While discussing the figures, it should be pointed out that because of the spread of Coronavirus, the popularity of some forms of gambling has significantly slimmed down, which was exactly the case with restaurant casinos.
Another thing to consider is that up to this point, the total number of active licenses granted by the Gaming Commission is 70, while the number of fully licensed betting sites is around 270.
The Increased Player Satisfaction
It turns out that not only Swedes’ engagement in different forms of gambling is on the rise after the liberalization of the market, so is their satisfaction in such activities. According to the available data, the satisfaction index of residents of the country has skyrocketed back in 2020 and has reached 64%. This is a significant increase in comparison with the 57.9% level the index scored a year earlier. Such surveys were carried out for the first time back in 2017, and so far, the biggest shoot-up of the value of the index was scored last year.
Most experts ascribe the increase to the opening of the gambling market, and describe it as a successful move that will continue to take hold in the next years.
The results from the survey also show that the confidence gap is narrowing as the trust in the industry has also seen an increase. Still, non-gamblers continue to be skeptical about the industry as just around 20% of them think that the Gambling Authority and operators care about gambling enthusiasts.
What is slightly troubling is that the share of Swedes who are well-acquainted with the gambling-related legislation of the country is exceptionally small. So is the share of people who know how to verify if the seal of approval of the operator is valid.
