Riksrevisionen, the Swedish National Audit Office, has completed its audit of Spelinspektionen and has determined that the authority’s supervision of the country’s gambling market is ineffective.
In response, the gambling regulator has stated that it welcomes the audit office’s review, noting that “several issues are still awaiting practice in court” and that it has also received increased budget funds for 2024, which were “a decisive factor” in developing its operations further.
‘Not sufficiently effective’
The audit of Spelinspektionen began in November last year, with Riksrevisionen tasked with assessing if the regulator’s management over the Swedish gambling market is effective. Part of the audit’s responsibility was to see how Spelinspektionen had supervised the country’s gambling since the market was re-regulated in 2019.
A licensing system was introduced during that year to allow for gambling to take place under public control, increase channelisation to licensed operators, protect players and provide revenue to the government and for public benefit.
Within its report, Riksrevisionen concluded that the authority supervision is “not sufficiently effective to meet the expectations expressed by the Riksdag and Government in connection with the reregulation of the gambling market”.
The audit office stated that Spelinspektionen conducts too few inspections, fails to prioritise assignments, and does not follow up on supervisory decisions, in addition to highlighting that supervision of the market has been “hampered by the lack of clarity in the Gambling Act”.
Regarding inspections, Riksrevisionen noted that the gambling regulator is conducting too few inspections across both the licensed and unlicensed markets, adding that it considers “the perception and credibility of the system is directly linked to the regular supervision of all types of licences and forms of gambling”.
However, the audit office did note that Spelinspektionen’s action against the illegal market is limited due to a “lack of clarity in the gambling act”, which has been “ pointed out in the past without the government taking initiatives to address the problem”.
Claudia Gardberg Morner, Deputy Auditor General of Riksrevisionen, commented: “Supervision of gambling that is associated with high risk is particularly important. This includes commercial online gambling and betting, which should be controlled much more. It is also important to exclude illegal gambling from the market.”
As for assignment priority, Riksrevisionen said the regulator has given supervision of the market “lower priority” in relation to other tasks such as licence and permit applications.
Yet, the audit office stated that government assignments and other tasks have been gradually added to Spelinspektionen’s remit without additional resources being provided, contributing to the “limited scope of supervision”.
Riksrevisionen added within its report that the Swedish government “has been aware of these circumstances but has not taken sufficient measures or informed the Riksdag”.
“In this situation, it is particularly important that the supervisory resources are used where they bring the most benefit,” said Hedvig Tängdén, Project Leader for the audit.
“To achieve this, the Authority needs to base its supervisory planning on systematic risk analysis. This is not currently the case.”
Riksrevisionen noted that during the Swedish market’s reregulation, intense periods of development took place, where adequate solutions were found quickly at times, but “in other cases, the process has been more protracted”.
The audit office reported that on the whole, Spelinspektionen has “established appropriate processes and support” for supervision and managing conflicts of interest, but it has so far not followed up on the results of its supervisory decisions, adding that “only one follow-up supervision has been carried out in the last five years”.
Therefore, Riksrevisionen has determined that the authority doesn’t know if “identified deficiencies have been rectified and thus lacks knowledge of whether the use of inspections has been cost-effective” and that planning processes for supervision need to be developed.
Comments were made about the Swedish Gambling Act as well, with the audit office claiming that supervision of the market has been “hampered by the lack of clarity in the Gambling Act, which has opened up the possibility for a ‘grey’ gambling market in Sweden”.
Riksrevisionen stated that while several amendments have been initiated or decided upon to add powers/tools to Spelinspektionen, the government must “continue to actively monitor developments”, “take measures to further develop the regulatory framework” if necessary and ensure the authority “has sufficient powers and effective tools for its supervision”.
Morner added: “The government should clarify in which cases online gambling requires a licence. This would facilitate supervisory activities.”
Recommendations
At the end of its report, Riksrevisionen has listed six recommendations – three each for the government and Spelinspektionen – to improve the supervision of the Swedish gambling market.
For the government, the audit office has recommended that it:
- Ensures the gambling authority has the conditions to carry out effective supervision to a sufficient extent.
- Ensures that reliable and accurate information on the scope and results of the supervision are produced and informs the Riksdag accordingly.
- Investigates the question of the scope of the Gambling Act in order to clarify in what cases online gambling is covered by the Gambling Act. In this context, consider the possibility of expanding the scope.
To the gambling authority, Riksrevisionen has recommended that it:
- Develops the arrangements for planning, managing and following up supervisory activities, including systematic risk analysis, longer-term planning and annual supervisory planning.
- Works actively to increase the scope and effectiveness of the authority’s inspections of both the licensed and unlicensed gambling markets, including an examination of the conditions for reallocating resources.
- Continues to develop the authority’s methods and support for supervisory activities, including procedures to verify that the supervised entities rectify the identified deficiencies.
Spelinspektionen’s response
Spelinspektionen has responded to Riksrevisionen’s report, stating that it welcomes the review, but highlighted that “several issues are still awaiting practice in court” and that increased budget funds for 2024 were “a decisive factor” in developing its operations further.
Camilla Rosenberg, Director General of Spelinspektionen, stated: “We welcome the National Audit Office’s review and since the reregulation have carried out ongoing change work and still have work to do.
“We can look back on six very intense years with new framework legislation, new actors and new tasks in a completely new regulation. Several issues are still awaiting practice in court. The authority has also received increased budget funds for 2024 that we requested, which is a decisive factor in being able to develop the business further.”
Spelinspektionen noted that it is working “continuously to develop and streamline processes and routines” and that in its 2024 plan, it has prioritised “continued development, by streamlining processes, routines and system support as well as the work with risk analyses/risk assessments”.
In addition, the authority stated that in the past year, it has made organisational changes to further strengthen its analysis work.
