BOS has previously published its Swedish reply to the Ministry of Finance regarding Shekarabi’s suggested measures against the gambling market. Here is the English version of that reply:
The Swedish Trade Association for Online Gambling has taken part of the memorandum issued by the Swedish Ministry of Finance which consists of a suggested temporary regulation with regards to the covid 19-virus impact on society.
The proposal includes measures which will have negative effects on licensed gambling companies’ terms on the Swedish market. It also includes measures which the Government claims will aid its efforts against unlicensed gambling. Regarding the measures aimed at licensed gambling companies it can be noted that these will have an immediate effect as soon as the first of June this year, that is in less than a month. With respect to the measures aimed at unlicensed gambling companies it can be noted that the state essentially has had these instruments to its disposal since the reregulation of the Swedish gambling market and that the effects of these measures so far have been absent. We would welcome a bigger focus from the state on keeping unlicensed gambling companies out of the gambling market, but it would hardly have full effect from the first of June this year. Therefore, if the proposal made by the Ministry of Finance is passed, it will lead to yet another competitive advantage for the unlicensed gambling companies compared to the licensees.
Our members struggle to see the same dramatic increase in online casino that the Minister appears to be seeing. We ask for independent sources verifying this increase. When we ask our members, they have noted a very slight increase in online casino, approximately one percent. This figure has not been produced using scientific methods, but since the Ministry of Finance has not presented any numbers supporting their claims we still consider our own inquiry to be relevant. At least until we have more robust data. We struggle to see such as development. And unless the Ministry of Finance has access to other data that is yet to be presented, it would be difficult to motivate the Government betrayal of the reregulation that was decided by the Swedish Parliament.
The proposal from the Ministry of Finance comes in a time when the channelisation of the Swedish gambling market is on its way to a fiasco. The objective of Government and Parliament is that at least 90 % of the gambling exposed to competition should be channelised into the Swedish license system. The Government does not have a mandate on its own to lower this channelisation goal.
The Swedish Gambling Authority has through two channelisation surveys from 2019 demonstrated a falling channelisation and that the channelisation already during the autumn of 2019 had fallen below the objective of 90 percent.
BOS has through the assessment company Copenhagen Economics showed that the falling trend has continued into 2020. Copenhagen Economics estimates the current channelisation to be at 81-85 percent. Up to every fifth gambling SEK has thereby already left the license system.
In addition to the mentioned measurement, Copenhagen Economics has for the first time in a Swedish context measured channelisation for single gambling verticals, among them betting on horses and online casino. The measurement shows a very high channelisation for betting on horses (98%) and a very low channelisation for online casinos (72-78%).
A Government that fails to channelise gambling to its own country’s license system hands that responsibility over to gambling authorities in other countries. That is a poor strategy and it works even worse now than before the reregulation. Previous to the reregulation unlicensed betting companies were in general not licensed by Sweden but by another EU-state. The companies that today is actively siding outside the Swedish license system is however normally lacking license from another EU-state. Instead it has become common to have a license from Curacao, were the consumer protection is inadequate to say the least.
If the Government were to move forward with the proposed propositions it will push the development towards an increasingly weaker channelisation to the Swedish license system. Especially contradictory is the fact that the efforts seems to be especially harsh against the betting vertical which has the greatest need of supportive channelisation efforts – online casinos – while the minister in charge, at least orally, has informed that that he, from a commercial policy perspective, is considering to make an exception for the betting vertical which doesn’t have a problem with channelisation what so ever – horse betting. The betters with problems are in this scenario completely left to their own faith.
BOS has also noted that
- Countries whose governments completely or partly forbid gambling and/or gambling marketing will be exposed to the same kind of problems with channelisation as Sweden.
- Regarding Great Britain and its gambling industries, self-regulation refers to a country with roughly 95 % channelisation and an absence of disloyal competition from unlicensed betting companies as well as state owned and/or regulated gambling companies. In that sort of environment, it is easier for the industry to undertake longstanding self-regulation because the industry is aware that imposition affects all equally.
- The Ministry of Finance has done nothing to prove that there is an actual increase in online casino
- The Ministry of Finance has not consolidated with the industry regarding what kind of practical consequences the introduction of the proposed measures will lead to, as well as what kind of timeline is reasonable for an imposition. The Ministry of Finance is heavily underestimating the timeline for implementing the proposed measures.
- The Ministry of Finance does not specify what they mean by log in-time. Does it refer to active betting or only the fact that the punter is logged in? Multiple sports betting companies offer live broadcasts of sport; shall these counted even if no betting is taking place? Shall a Swedish participant in online poker be thrown out from an international tournament if the time limit is reached?
The Swedish gambling regulation was one of few successful reforms during a closed political term under Prime Minister Stefan Löfvens first term of office. The advantages of the reform reside with the fact that consensus was reached between the two political coalitions.
We have recognized protests from parties who are not in the Government with regards to the now notified regulation. It is deeply regrettable that the Government does not show care for the long-sightedness of the reform and instead does quite the opposite in seemingly show willingness to sacrifice the political consensus which took a decade to tirelessly build.
And what’s worse is that the Government seemingly seems willing to sacrifice the channelisation, without its success the gamblers with problems is thus left to their own faith.
If the Government proceeds with these proposals it should be prepared for a level of channelisation so low that it threatens the license system in its core as well as an increase of gambling problems associated with unlicensed betting.
If the Ministry of Finance, against its better judgement, decides to proceed with the regulation, BOS presumes that it will be EU-notified according to standard procedures. We cannot see how the requirements for an urgency procedure are met.
To conclude, we underline that the suggested measures are an infringement against EU law. They are discriminatory against licensed operators. They are not purposefully adopted nor compatible with the principle of proportionality.