The Swedish iGaming Market: How to Run a Successful Operation While Complying with Regulatory Limitations

Sweden has one of the most comprehensive regulatory systems when it comes to igaming, but even with regulatory constraints, it is absolutely worth it if operators choose the right vendor partners whose technology enriches players' betting experience.

As a large and dynamic market with high-value players, the region is attractive, but not everyone can succeed. However, a closer look at the current state of the Swedish igaming market, regulatory framework, advertising rules, and more will show why it's worth the challenge.

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Current iGaming Market in Sweden

The Swedish igaming market is growing fast. GGR was €50 million in 2017, but is projected to reach €1. 69 billion in 2024 (source). It is predicted to reach a peak of €2. 15 billion at the end of 2028.

The number of players is similar, and has been growing for as long as tracking has been carried out. For example, in 2022, the number of players in Sweden increased significantly, increasing by 72% from the 58% recorded in 2018 (source).

In terms of taxation, a tax rate of 18% is applied to the total revenue from all forms of gambling. As a result, the country's gambling revenue in 2021 reached 720 million euros, including contributions from gambling tax, corporate tax, and dividends from Svenska Spel AB, the Swedish state-owned company that operates the market. It is responsible for the provision of various forms of gambling services, such as lotteries, sports betting, and casino games.

Online Gambling Legislation in Sweden

Sweden is one of the most heavily regulated igaming markets. Spelinspektionen, also known as the Swedish Gaming Authority (SGA), has been overseeing the regulation of all gambling activities in the Nordic country since January 2019. The authority is committed to implementing strong measures aimed at maintaining a balanced, fair, and transparent gambling market. In particular, it focuses on mitigating the potential negative social effects of gambling, such as unsolicited gamblers and problem gambling.

Spelinspektionen monitors three categories: online gambling and betting, state monopolies including live casinos and cash machines, lotteries and bingo. In terms of market share, online casinos hold the largest share, followed by sports betting (including horse racing) and lotteries.

Gambling laws and regulations:

• Swedish Gambling Act (2018: 1138).
• Swedish Gambling Tax Act (2018: 1139).
• Gambling Ordinance (2018: 1467)
• Rules and general advice published by the Swedish Gambling Authority
• Recently, a number of important amendments to the Swedish Gambling Act have been proposed and are due to come into force from 1 April 2024. The aim is to further strengthen consumer protection. Operators will be required to obtain prior written approval for phone games and will be allowed access to financial and health-related customer data to combat excessive gambling. The amendments also address violations of money laundering laws and harmonize penalty rates for operators.

These legal changes follow the introduction of supplier licenses and new enforcement powers for Spelinspektionen on 1 July. The government also proposes to increase the gambling tax rate from 18% to 22% of gross gaming revenue in July 2024. Supporters of the proposal argue that the gambling market has stabilized since the regulatory initiative was launched in 2019. Thus, even with the increase in the GGR tax, the 90% channel will be able to remain.

In contrast, the Online Gaming Industry Association (BOS) claims that according to the results of a specialized survey carried out in the first quarter of 2023, the actual channelling level will reach 77% (for the entire Swedish gaming industry), 72% (for the Swedish igaming sector) and 84% especially for sports betting. The increase in the GGR tax, combined with strict legal obligations, will lead to an unrestricted customer experience and provide a competitive advantage to unlicensed operators.

In line with the proposed tax increase and the 90% target of the administration, the Swedish gambling authorities will develop a new strategy to tackle illegal gambling operations. This will investigate whether online gambling targets Swedish customers, taking into account, among other things:

• The use of PSPs registered in Sweden or with a high volume of Swedish customers;
• Acceptance of Swedish e-identification for authentication purposes;
• The igaming operator or its affiliates are marketing in Swedish.

Advertising Rules for Gambling in Sweden

In Sweden, all forms of gambling and betting are permitted, as is their advertising, but like everything else, there are strict regulations set out in the Swedish Gambling Act. According to marketing regulations, only games and lotteries licensed in Sweden can be advertised. Gambling offers are overseen by Hallå konsumer, a national information service coordinated by the Swedish Consumer Agency. The main guideline for gambling advertising is "moderate". In particular, promotions cannot be targeted at people under the age of 18, or those who have voluntarily excluded themselves from gambling activities or who have been certified as problem gamblers.

Before advertising a gambling site in Sweden, it is essential to comply with state requirements. For a sports betting site or casino with a Swedish license, certain criteria must be met, such as:

• Use of the top-level domain . se
• Transactions in Swedish currency
• Providing all information in Swedish
• Customer service in Swedish

Regarding bonus advertising, licensees can only offer or provide bonus offers when a player first joins the licensee's games (welcome bonus). Bonuses are defined as "discounts or similar financial incentives directly related to gambling", so the possibilities for promotions and discounts are very limited. The Swedish gaming authority has imposed heavy fines on operators who violated the bonus regulations (especially against LeoVegas and ATG in 2021).

Compliance with self-exclusion services such as Spelpaus. se and displaying the logo of the regulator Spelinspektionen are mandatory.

As of 2022, gambling advertising spending in traditional media has decreased by 15% compared to 2021. Notably, €3. 4 billion was allocated in 2022, down from €4 billion.

Online casino advertising (30%) and sports betting (28%) remain prominent. In September 2022, a notable change occurred when the Swedish gaming regulator banned autoplay on online slots, bringing them in line with practices in the UK and the Canadian province of Ontario.

Recently, the Swedish parliament's culture committee rejected a proposal to impose stricter advertising restrictions on risky gambling products, saying it was an attempt to introduce a tiered system "through the back door" (source).

The committee's attitude was shown in a report on the gambling reform bill aimed at minimizing harm and strengthening management.

Initially, the government was considering banning hig h-risk gambling ads from 6:00 am to 9 pm.

However, the official version of the law announced by the government did not decide to prohibit it. Instead, gambling advertisements were clarified that they were subject to "modified moderation."

Preferences of Swedish Online Gamblers

Last year (July 2023), a report was compiled in the report of the Swedish onlinebertar, based on the Swedish Gambling Agency (SPELINSPEKTIONEN). The result was quite interesting:

• 14 % participate in online gambling at least once a week.
• 31 % have participated in online gambling more than once in the quarter.
• 50 % of players only participate in one kind of online gambling.
• Men participate in online gambling about twice (42 %) of women.

Sweden's strong economy and disposable income have also contributed significantly to the expansion of the online gambling market. Increasing disposable income encourages participation in leisure activities, including Igaming. In Sweden, gambling is culturally accepted as entertainment, further supporting market growth.

Popular Games and Sports to Bet on in Sweden

The same survey revealed that the 2018 survey revealed more relevant information on the taste of Swedish gamers. The preferences of gaming and casino sports are clear:

• Lottery and numberer games are the most popular online gambling, and 60 % have participated in lottery and numberer games.
• Horse racing and other sports betting are 36%, respectively, ranking second. Combined with casinos and sports income, sports betting accounts for 49 % of GGY as a whole.
• 20 % played in casino games such as slot machines.
• Bingo is 11 % and poker is 7 %.

In recent years, ESPORTS has grown in Sweden. According to the Sports Computer Federation, Sweden is leading the industry with China, the United States, Germany and the United Kingdom. From these indicators, Nordic sports books can be said to be a niche. < SPAN> committee's attitude was shown in a report on the gambling reform bill aimed at minimizing harm and strengthening management.

Ways To Operate Successfully in Sweden Even with the Regulatory Limitations

Initially, the government was considering banning hig h-risk gambling ads from 6:00 am to 9 pm.

• However, the official version of the law announced by the government did not decide to prohibit it. Instead, gambling advertisements were clarified that they were subject to "modified moderation."
• Last year (July 2023), a report was compiled in the report of the Swedish onlinebertar, based on the Swedish Gambling Agency (SPELINSPEKTIONEN). The result was quite interesting:
• 14 % participate in online gambling at least once a week.
• 31 % have participated in online gambling more than once in the quarter.
• 50 % of players only participate in one kind of online gambling.

Men participate in online gambling about twice (42 %) of women.

The Future of Gambling in Sweden

Sweden's strong economy and disposable income have also contributed significantly to the expansion of the online gambling market. Increasing disposable income encourages participation in leisure activities, including Igaming. In Sweden, gambling is culturally accepted as entertainment, further supporting market growth.

In Conclusion

The same survey revealed that the 2018 survey revealed more relevant information on the taste of Swedish gamers. The preferences of gaming and casino sports are clear:

Lottery and numberer games are the most popular online gambling, and 60 % have participated in lottery and numberer games.