Gustaf Hoffstedt, the secretary general of the Swedish Trade Association for Online Gambling, expressed concerns about the possibility of needing to re-regulate the Swedish gambling market due to decreasing rates of channelisation. Speaking at the SBC Summit Barcelona – Digital during a panel titled 'The fallout from Sweden,' Hoffstedt highlighted that the newly introduced deposit limits are pushing players toward unlicensed offshore casino sites. The panel was moderated by Jesper Kärrbrink, creative director at Green Jade Games, and struggled to find positives stemming from the re-regulation of the market, aside from player protection measures, channelisation, and credibility as significant outcomes.
Kärrbrink referred to the deposit limits as the ‘elephant in the room.’ Hoffstedt noted that the channelisation rate in Sweden is precariously close to the level that prompted the market's re-regulation back in January 2019. He stated, “We shall remember the temporary measures and other issues which are hurting the gambling regulation – which are not from the gambling authority but from the government. They believe that they have reasons to safeguard a number of land-based gambling operators.” He pointed out that the government still owns Svenska Spel and holds the majority of seats on the board of ATG, as well as its own lottery company, which influences their motivation to protect certain sectors of the gambling industry. The temporary measures were introduced amid fears that online casino activity would surge due to COVID-19, though Hoffstedt noted that the Danish regulator had dismissed similar concerns when assessing their market.
He criticized the Swedish government for imposing restrictions on online casinos while allowing other segments, like trotting, to flourish despite increases in activity due to sporting restrictions. Hoffstedt explained, “When a digital industry says that you cannot make offers to your customers, it would effectively reduce the competition.” He revealed that earlier this year, channelisation was measured at 80-85%. However, it fell to 75% for online casinos after the limits were introduced. A request for estimates from Copenhagen Economics projected that future channelisation could drop to between 52-63%, alarmingly close to the rationale behind Sweden’s initial re-regulation.
Hoffstedt voiced uncertainty regarding the enthusiasm of privately-owned businesses for another re-regulation. Morten Ronde, managing director of Nordic Gaming, added that the key difference between Swedish and Danish markets lies in their laws on bonus offers, indicating that Sweden’s prohibition has stifled competition. He noted, “Not only is the purpose of the Swedish and Danish legislation the same, I’d say the wording of the law is almost identical. I’d guess that 80 per cent of the law is the same – but it’s that final 20 per cent that makes the difference.”
Ronde pointed out that while Denmark has strict regulations about bonus offers, they are still permitted, allowing for more competitive market conditions. He criticized Sweden's market environment as being non-transparent, where communications between operators and the gambling authority occur only through representatives, creating liabilities for suppliers.
Contributing to the discussion, Thomas Vermeulen, affiliate and internationalisation manager at Smarkets, acknowledged that while the limits might not negatively impact average players, they could drive high-value customers to offshore sites. He stated, “I think the limits will have a negative effect. There was previously a report which showed that the average loss of a Swedish gambler over the year was roughly 5600 SEK, meaning that only a small percentage of the user base is generating a large portion of the revenue while a large majority are playing with significantly lower amounts.” He believed that smaller players would not face significant effects, whereas more valuable players have already shifted their focus to offshore platforms.
Fintan Costello, managing director at BonusFinder, strongly criticized the new measures as ineffective in protecting players. He referred to them as “ridiculous” and pointed out that, despite their intent, players can still open multiple accounts and gamble offshore. He concluded, “It’s failing in protecting those that it’s aimed at. It’s clearly just politics – I’d argue that it’s not even aimed at player protection, it’s just pure politics.”
