The industry reacts to Sweden’s severe deposit and bonusing limits

Sweden’s government shocked the industry on Thursday after announcing its intention to implement mandatory weekly deposit limits of SEK5,000 with effect from 1 June for the remainder of 2020.

The restrictive legislation, which the government argues will protect consumers from gambling-related harm during an extended period of coronavirus lockdown, includes capping customer bonuses at SEK100 per week, the equivalent of £8.

The government, led on this initiative by Social Security Minister Ardalan Shekarabi, also announced heightened regulatory power for the Swedish Gambling Authority (SGA) in tackling black-market operators and their advertising as it predicted the gambling sector’s counter argument.

The industry is prepared to fight against the measures by insisting the strict caps on wagering and bonuses will drive consumers away from the licensed system and into the welcoming arms of unregulated, offshore operators.

The current channelisation rate in Sweden is estimated to be in the region of 85% after the market regulated in 2019.

The SGA has accepted the new government standards, claiming it will serve to strengthen protection of online players for the duration of the Covid-19 pandemic.

SGA director general Camilla Rosenberg said: “Now there will be an even clearer focus on gaming responsibility and the fight against illegal gambling. We make immediate adjustments to the organisation in order to meet the new demands placed on the authority.”

Alternatively, Gustaf Hoffstedt, CEO of Swedish trade association BOS, said the new rules would “create further incentives for punters to abandon the regulated market in favour of another market with zero costumer protection”.

Below, former monopoly operator Svenska Spel, LeoVegas, analyst firm Redeye, Nordic Gambling’s Morten Ronde and affiliate start-up BonusFinder all share their thoughts on the potential impact of the new restrictions.

Svenska Spel CEO Patrik Hofbauer

The government’s actions are tough. We can understand that you need to act in the special situation that prevails. Consumer protection must come first. At the same time, we are surprised by what we think is missing about consumer protection, having previously highlighted this in the debate around match-fixing.

It is difficult to interpret the minister’s proposal as anything other than a substantial underrating of the gambling industry’s ability to present powerful measures themselves. Several companies in the industry have certainly taken the initiative and already imposed their own restrictions. But a chain is never stronger than its weakest link. Now it is time for all gaming companies with a Swedish licence to seriously consider what they can do to protect customers, sports and society.

The minister’s signals are clear: If the industry cannot resolve it on its own, it will result in political control. I hope it will be an awakening for those gaming companies that have shown a slight interest in constructive solutions.

Svenska Spel CEO Patrik Hofbauer

Redeye analyst Jonas Amnesten

The new measures were expected as Shekarabi already had communicated several weeks back that he saw the need for further measures. It is good that he really addresses the issue with the unlicensed operators as we have been seeing signs of decreased channelisation. The national self-excluding system in Sweden, Spelpaus, is an important tool to prevent addicted players from gambling. However, we have seen that it is far too easy for these players to play on unlicensed operators that don’t have these protective tools.

I believe that the bonus restriction to SEK100 will have a very limited effect. It will limit the players’ tendency to try out new casinos, but it will be mainly the players that will lose as they can’t play for as much credits. The weekly limit of SEK5,000 in deposits, and the time limits to some degree, will have a much larger effect as it will hit the high rollers that generate a large part of the total NGR. We believe that operator dependency on high rollers has decreased during 2019 in Sweden due to new regulation.

However, it’s still significant and a rough estimate would be a drop of between 10%-30% in the Swedish market due to these new measures, depending on the game categories. Furthermore, the SGA will release a report in a month or two over how the demographic looked like in 2019, which should bring some more clarity of the impact. We will also see the impact in our monthly reports of the Swedish gambling market once the measures are implemented.

Jonas Amnesten, Redeye

Nordic Gambling founder Morten Ronde

We are surprised to see such restrictive measures being introduced seeing that there seems to be little evidence that the online casino market has grown substantially during Covid-19.

We are sure that the new rules will make it more difficult to operate profitable business and we doubt that the government can introduce measures which will keep the players from using unlicensed operators.

Morten Ronde, founder and managing partner, Nordic Gaming

BonusFinder MD Fintan Costello

As we showed in our study of the Swedish market, there is already increasing demand in Sweden for casinos without a licence or casinos not on Spelpaus.

The proposed tightening of restrictions in Sweden will just accelerate this trend and drive even more players into the arms of illegal offshore operators. This not only creates a situation where players are exposed, but it also damages licensed Swedish operators which are playing by the rules and trying to do the best for Swedish players. I’d ask for a sensible and open dialogue between all stakeholders in the industry.

Fintan Costello, BonusFinder MD

LeoVegas communications director Hans Uhrus

We look forward, with confidence, to the commendable efforts presented by the Social Security Minister Ardalan Shekarabi, but unfortunately we fear that the planned measures will have the opposite effect with a deterioration of consumer protection for the most fragile players during a critical period. The challenge on the Swedish market today is that the proportion of all consumers who choose to play on licensed companies is decreasing.

Our estimate is that 20%-30% of all online casino games are already outside the regulated market today, without consumer protection, no tax revenue and with the absence of measures that counteract money laundering. We fear that further restrictions on the licensed market will instead increase the shift to the black gaming market. Power should be taken against the black companies, without a licence, which act on the Swedish market. So far there has been no success in reducing gaming on the black companies, and today the minister did not have any concrete answers as to why they should succeed better now.

Hans Uhrus, chief communications officer, LeoVegas