When the new Gambling Act took effect in January 2019, Svenska Spel and AB Trav och Galopp (ATG) faced licensed competition online for the first time, leading to significant transformations within both organizations.
Svenska Spel's changes primarily aimed to curb the advantages of its former monopoly status in online betting and gaming. Patrik Hofbauer, CEO of Svenska Spel, shared that the adjustments involved aligning the organization’s operations with the new regulations.
"The biggest change was to adjust the whole organisation and operations to be in line with the re-regulated gambling legislation," he explained. Today, Svenska Spel operates as a group with three distinct business areas, necessitating the separation of customer systems among them. The operator spent 2018 preparing for re-regulation, encountering challenges such as revamping ID systems and logins. "Thanks to what I would say was careful planning and dedicated colleagues here we succeeded without major problems," Hofbauer noted. "But it was a major challenge for the company. You can imagine turning from one company into three different companies."
In contrast to Svenska Spel, ATG had the opportunity to branch out under the new regime. The operator expanded into sports betting and online gaming, building on its established racing customer base. "We launched sports betting and online casino ourselves without any history of these products and we’ve been quite successful," said CEO Håkan Skarplöth. "We are by far the biggest operator in the commercial part of the gambling market in Sweden. Of course, we had a huge customer base from our horse betting history, but we worked hard with content and betting experiences."
Despite adaptations at Svenska Spel, critics argue it retains an unfair advantage due to its state ownership. The Branschföreningen för Onlinespel (BOS), representing the private licensed sector, calls for the prior monopolies to lose their privileged market position. "To run a commercial gambling business is not appropriate for a state. A state shall set rules for commercial gambling companies and make sure the companies comply with these rules, rather than being an active player on the market itself," remarked Gustaf Hoffstedt, secretary-general of BOS, in June.
Hofbauer disagrees with this perspective, asserting that Svenska Spel operates under the same regulatory conditions as all licensed gambling companies. "We don’t get any special treatment because we are state-owned. We are audited by the same regulator, the same authorities as other operators," he stated. He mentioned that BOS had previously lodged a complaint against Svenska Spel with competition authorities, which was ultimately dropped, affirming that the company was adhering to regulatory standards.
Calls for restructuring of Svenska Spel have emerged from those opposed to state ownership in online gambling. Such proposals include selling off the Sport & Casino division to private entities. Hofbauer defended the structure of Svenska Spel, emphasizing that a unified company allows for stronger responsible gambling policies. "One positive is that we can actually take the lead in areas like consumer protection and responsible gambling," he said, noting the company conducts extensive personal interactions for responsible gambling initiatives.
ATG, while owned by horse-racing authorities and tasked with returning profits to the sport, exists in a complicated space between state ownership and the private sector. Skarplöth articulated that, despite differing ownership structures, fundamental business objectives remain aligned. "As the CEO you don’t control what kind of competency or background you get on the board. But ATG’s focus is to make money for our owners and to make our customers like us. And I would be surprised if any operator has a different focus than that."
Despite the shared goal of profitability, Skarplöth claimed that ATG's efforts have emphasized sustainability more than many commercial operators until now. He acknowledged that it makes sense for Svenska Spel to be divided but clarified that it is not a pressing issue for him or the government.
Discussions of restructuring gained traction following the recent elections in Sweden, where the new centre-right Moderate Party sought to break up Svenska Spel. However, Hofbauer remarked on the lack of immediate action from the current government, which stated that liquidating state-owned companies is not currently a priority. He added that all state-owned enterprises engage in dialogue with their government, and as of now, no substantial changes are anticipated.
