The Challenges of the regulatory framework in Sweden

June 8, 2023

In the recent interview our team discussed the uncertain future of the channelization rate for online casinos in Sweden. The team highlighted the importance of licensed operators being able to compete effectively with unlicensed ones by offering innovative products. This approach, they believe, can help retain players within the licensed system and deter them from seeking alternatives outside the regulated market.

The channelization rate for online casinos is estimated to be between 60% and 78% today, depending on who you ask. What do you think the channelization rate will look like in 2030? Will it become more or less popular to play at a casino without a Swedish license? Why do you think it will be like that?

It is, of course, not easy to predict - but in our view, it very much depends on whether or not licensed operators will be given the opportunity to compete on more equal terms with non-licensed operators. More specifically, to have the opportunity to deliver more innovative and engaging products to retain players within the license system, so they do not begin to explore other opportunities. If the system stays as it is right now, unlicensed gaming sites with more interesting bonus and rewards mechanisms will be very attractive to Swedish players that seek such benefits.

Currently, license holders may only give one bonus per new player. How do you think bonuses will look in the Swedish casino market in 2030? Will the bonus restriction be abolished or will there be even stricter restrictions instead? What restrictions, if any?

This very closely tied to the first question of course. The "one bonus per license" rule is the one that really sets the Swedish market apart from other markets and in our view, it does not lead to a good experience for players. These experiences might drive them to seek new sites.We frequently get complaints from players who (despite the fact that we are clear about this in our terms), thought they could receive a welcome bonus on one of the brands that we advertised, after having already received an offer. Players are not always aware that a licensed company can offer multiple brands in the market, so if they have received the welcome offer already on one brand, we have to disappoint these players and this is not the best start for them. We hope that politicians and policy makers will consider this if a revision of the bonus restrictions is discussed at some point. Perhaps they will consider a less restrictive model where players can receive multiple bonuses and campaigns (perhaps with some restrictions on, for example, the wagering or similar), so we avoid this and create a more competitive product vs. the non-licensed operators. If the licensed operators in the market continue to work closely with authorities in Sweden to constantly develop even more methods to help players play safely and moderately, then additional bonus and reward solutions could add more entertainment within a secure system.

Right now, 59 players have a license for commercial online gambling, and since July 1, 2023, the licensing obligation also applies to game providers (the Gambling Inspectorate has so far received around 60 applications). How many casino operators and how many gaming providers with a Swedish license do you think there will be in 2030?

We think the number will grow slightly due to the fact that more operators are acquiring licenses within the same corporations, as well as new ones wanting to try and get a foothold in the market. However, we doubt there will be a dramatic increase. This is because we see a continued consolidation in the markets through mergers and acquisitions, as well as the issue of increased competition, which will force others to exit the market.

Over 60% of online players play primarily at Svenska Spel. What do you think it will look like for Svenska Spel in 2030? Will the state listen to the industry's pressure and sell sports & casino or will the state continue to compete with private players and launch new sites in the style of Momang Casino?

That is a very difficult question to answer but we suppose anything is for sale if the price is right. In our opinion, Svenska Spel has done a good job since the regulation was changed in 2019 and it continues to deliver a steady revenue stream for its owners, so we doubt this will happen anytime soon.

Any other changes you think we will see in the Swedish gaming industry in the next five years? (for example related to payment methods, Game pause, game advertising, game restrictions, social media or AI)

We would imagine that given the current, somewhat negative, political climate surrounding online gambling which can also be observed in other countries, could lead to further restrictions being introduced. For example, when it comes to restrictions on marketing of gambling. We do hope that policy makers will see the benefits of encouraging having an attractive, competitive, and vibrant market that seeks to retain players within the safe and stable license system.