Swedish gaming operators lash out at social security minister

Sweden’s leading licensed online gaming operators have accused the country’s social security minister of torpedoing the regulated market with the introduction of new regulations that have no basis in fact.

The outcry follows the introduction of new rules that come into force on June 1, limiting consumer deposits for online gaming to SEK5,000 (approx. €440) per week.

The restriction was announced in late April by social security minister Ardalan Shekarabi in response to an increase in online gambling in the absence of sports betting due to the COVID-19 pandemic.

This prompted the chief executives of Betsson, Kindred Group, LeoVegas, NetEnt and William Hill to challenge the reasoning behind the new deposit limit, which they believe will drive consumers to more attractive unlicensed alternatives on the internet.

In an open letter to Shekarabi, the CEOs challenge his assertion that online gambling has increased due the pandemic and accuse him of distorting the market in favour of operators who chose not to join the Swedish licensing system.

The letter states that the regulated market, which opened on January 1, 2019, was designed to channel players to licensed operators in order to provide greater consumer protection, with more than 90 companies applying for licensure. It adds that many others chose not to be regulated and continue to serve the market without a license.

“Today, only a year later, it turns out that the "package" that the licensed companies chose to buy and sign onto has changed character completely and thus risks losing all its appeal, benefitting companies that chose to operate on the black market,” the CEOs warn. “We must remember that it is the customers who choose where the best product is. In a digital world, that power does not lie with the state, or with us as corporations for that matter.

“We operate in a digital world and have direct access to all the relevant data needed to evaluate what measures can help strengthen our players’ safety and security while still providing attractive offers and products. The sad thing is that the government, with Ardalan Shekarabi at the forefront, does not want to talk to us about how we can work together and, with help from the insights we possess, develop a well-functioning Swedish gambling market.”

They point to recent independent research by Copenhagen Economics which found that an increasing number of Swedish players are choosing gamble with black market operators, causing the government to fail in its efforts to channel consumers to regulated sites.

“The biggest drop was among online casinos, where approximately every fourth krona gambled goes to an unlicensed company instead of a company with a Swedish license,” they wrote.

“Minister Shekarabi knows about this; he also has access to statistics that reveal a reduction in channelling. But for some inexplicable reason, he doesn’t seem worried that more and more players are going to the uncontrolled black market. The purpose of the re-regulation, which had broad support in the Swedish Parliament, was to create a more sustainable gambling market that functioned well in the long term. Now the minister is about to create a "Wild West 2.0" in the gambling market, and he’s doing it in the name of consumer protection.”

The chief executives warn Shekarabi that every business wants to be where the consumers are and that if they leave the regulated market, so will the companies.

“The Swedish gambling market not only provides safety and security to players but also contributes billions annually in much-needed tax revenue and investment in sports. By slowly eroding the Swedish gaming market month by month, the government risks bringing about major cuts in security, tax revenue, and societal investment,” the concluded.

“We can only be left to wonder why Ardalan Shekarabi wants to torpedo his own gambling regulations.”