Swedish Gambling Monopoly Svenska Spel Not for Sale, Despite Sweeping Market Reforms

Posted on: April 11, 2018, 12:30h. 

Last updated on: April 11, 2018, 11:09h.

Sweden’s state-owned gambling monopoly Svenska Spel will not be privatized, despite the government’s plan to break up the longstanding monopoly by introducing a licensing system that would, for the first time, be open to private operators.

Svenska Spel not for sale
Peter Alling of the Kindred Group believes that Sweden’s liberalization of the market will not create a level playing field between new licensees and Svenska Spel, the longstanding gambling monopoly. (Image: The Gambler Magazine)

The government published its full draft law on gambling on Monday, which has now been submitted to the country’s parliament.

Having fought a losing battle against private online gambling companies for the best part of two decades, Sweden has decided instead to bring them under its regulatory influence and tax them. The bill is entitled the “Re-regulation of the Gambling Market.”

“Unregulated gambling has taken over and gambling is used in criminal activities,” Minister for Public Administration Ardalan Shekarabi said in a statement. “It is 14 years since the first of a line of gambling inquiries was appointed. It is now time for us to move from words to action and regain control of the Swedish gambling market.”

Three Sectors

Operators have largely reacted positively to the news, but the decision not to sell Svenska Spel was criticized this week by the Kindred Group’s Head of Public Affairs Nordics, Peter Alling, who believes the state-owned gambling company will have a competitive advantage in the market.

The Kindred Group is one of several Swedish successful online gambling companies exiled to Malta due to its home country’s inhospitable online gambling laws.

“The proposal to the Parliament, made public Monday 9 April, reveals …that the government has no intention to take necessary actions to ensure a fair and competitive market, but instead to protect the dominant position of the state-owned operator Svenska Spel,” he said in an official statement.

The bill proposes the establishment of three sectors of the market: the so-called “Competitive Sector” for the newly licensed operators; the “Public Interest Sector,” composed of charitable forms operating lottery and bingo products; and the State Enterprise Sector, operating land-based casinos and gaming machines. Svenska Spel’s operations will straddle all three sectors.

Divided Market

“The reform intends to keep the market divided in one-part open to competition and one part exclusive to NGOs and governmental operator Svenska Spel,” complained Alling. “Since the current entity, Svenska Spel is to act on both the exclusive and the competitive market it is, from a competition law point of view, extremely important that Svenska Spel is split into two independent entities.

“The Ministry of Enterprise (owner of Svenska Spel) and the Ministry of Finance (responsible for legislation on gambling) has so far acted in opposite directions.” he continued. “Here, the government still has a responsibility it can’t avoid. Failure to deal professionally with the split, not adhering to basic competition regulations, will seriously endanger the outcome of the reform.”

The bill proposes charging new licensed operators a tax rate of 18 percent, while the non-profit sector will remain exempt from tax.  If enacted, the new regime would come into force on January 1, 2019.