Svenska Spel wades into Swedish iGaming regulation debate

This story was written for the September edition of The iGaming Times and can be accessed here.

Sweden’s state-controlled betting operator Svenska Spel has added its recommendations for the future of the country’s iGaming market. However, the company is not being clear about what kind of liberalisation it seeks — and whether it really wants to forfeit its monopoly status.

Bosses of Svenska Spel, Sweden’s state-controlled igaming operator, have been rounded on by critics, after they broke with convention in attempting to influence the liberalisation of the gambling market.

Making their comments in Dagens Samhälle, a news magazine, CEO Lennart Käll and chairman Erik Strand wrote: “New legislation is necessary, both in order for Swedish gaming customers to enjoy online games based on gaming responsibility and consumer protection, and to achieve competition on equal terms,” they wrote.

“Therefore, it is very welcome that the investigation proposes that unlicensed gaming activities be criminalised.”

However, the executives of Svenska Spel soon found themselves accused of bidding to steer future legislation in their own favour.

Fredrik Schulte, an MP of the Swedish Moderate Party, likened the executives to a “bull in a china shop” and denounced their input as “serious mischief”.

In this market, Svenska Spel currently holds monopoly status as the sole Swedish licence holder, but has just a fifth of the market share and competes with so-called “grey market” operators.

The executives’ op-ed came in response to the government review by the Lotteriinspektionen regulatory agency that proposes measures to liberalise

Sweden’s igaming market — including that Svenska Spel’s monopoly be replaced by a more “open” market that would allow the granting of licences to overseas operators.

Gustaf Hoffstedt, the secretary general of the Swedish Trade Association for Online Gambling, agreed with the Moderate Party MP: “I think Frederick Schulte had a point there,” he said.

“As a state-controlled operator, the government should be telling them what to do, not the other way around.”

Hoffstedt also warned against upsetting the delicate political balance between different stakeholders that must hang in place in order for potential reforms to go forward.

“The government review has been very balanced in terms of listening to all the stakeholders,” Hoffstedt said.

“The minister in charge, Ardalan Shekarabi, has shown many skills to build a majority of support for re-regulation from almost all of the political parties, whether they are in the government or in the opposition.

“The risk is now that, after the review has been published, the current minority government will listen too much to certain stakeholders and upset the balance.”

Svenska Spel has not been clear to what extent it truly supports liberalising the market, Hoffstedt added, given that the company is not seeking to privatise itself.

“Although they are in favour of liberalisation, I understand that they still want to regulate the market very much in favour of their businesses and they still want to be a state player in the gambling market.

“So I haven’t seen any suggestions from their side to privatise any of their own operations but to maintain their status as a state-owned operator.”

At face value Svenska Spel’s appeal to remove so-called “grey market” companies, some who are not licensed in Sweden but hold EU licences to operate, and currently control most of the market, could be reasonable.

But a more insidious motive could be that newly licensed operators become “over-regulated”, thus making it unfeasible for new licensees to realistically compete with Svenska Spel.

Hoffstedt, whose organisation represents 17 operators with EU licences, added: “They are very positive about the re-regulation and very positive about the proposed licensing system in the review.

“And as long as the government is not tempted to make the conditions worse than the suggestions in the inquiry, then there will no longer be a grey area in a couple of years.”

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