Sweden has been
a grey market in the modern age of online gambling, and yet the nation has
spawned some of the biggest names in the industry. As of 1 January 2019,
however, Sweden will become a fully regulated market following the aptly named
bill ‘A Re-Regulated Gambling Market’ being approved by national legislature
Riksdag.

In the past,
Sweden has been staunchly against liberalising its market away from the
state-owned monopoly, despite the numerous formal letters delivered by the
European Council. Sweden now opts to make changes to its laws to not only
comply with Article 49 of the European Commission Treaty, which guarantees the
free movement of services, but to also regain control of its gaming market. It
has been a long and hard-fought war between Sweden and the European Commission,
but the new policies and systems being brought in with the new laws will see
them ultimately win their crusade and maintain the principles that they have
been trying to defend.

A tyrannous monopoly

Up until 1
January 2019, the two main statutes that have governed gambling in Sweden have
been the Lotteries Act (1994) Lotterilagen and the Casinos Act (1999)
Kasinolag. The Lotteries Act made it illegal to promote gambling services that
had not been licensed by Sweden. The Gaming Board of Sweden has had the
responsibility of licensing and suspending gambling services, as well as,
monitoring compliance with the Casinos Act and Lotteries Act. Since 1997,
Sweden’s gaming scene has been ruled by the state-owned monopoly of Svenska Spel
and AB Trav och Galopp (ATG) as the only two operators to receive a license to
offer gambling services.

Over the years,
the Gaming Board of Sweden has upheld the two ruling statutes diligently, and
the Swedish courts have also been staunch advocates at every turn. In 2005, the
Swedish Supreme Administrative Court did not overturn the Swedish government’s
decision not to approve Ladbrokes’ application to establish betting operations
in the country. Ladbrokes also came under scrutiny following their placed
advertisement in daily Swedish newspaper Aftonbladet, which the Gaming Board of
Sweden reported to the police to have removed. In 2006, the Gaming Board of
Sweden reported the editors of newspapers Metro and Expressen, as well as,
editors at magazines Slitz and Spray for the publication of advertisements for
unlicensed gambling operators.

Sweden’s resilience to the European
Commission’s advances

In October
2004, the European Commission sent a formal notice stating that monopolies in
the nation’s gambling market can only exist if they have the objective of
limiting betting opportunities in the country and do so in a systematic manner.
Sweden ultimately upheld their gambling laws to be in line with the European
Commission. In June 2007, the European Commission sent a formal notice
requesting Sweden to amend their gambling laws. Sweden ruled to refuse to grant
non-Swedish operators a license to operate in Sweden in August 2007. It decided
that it must uphold the nation’s law in order to counter criminal activity and
maintain social security.

In June 2012,
the Swedish National Audit Office reviewed the government’s gambling laws with
a particular focus on whether or not they had achieved the goals originally
used to rationalise the establishment of a monopoly. Sweden initially
restricted private operators to maintain public order, prevent crime, and limit
addiction. It was all put in place to promote the safety of the Swedish public
via the use of Swedish-operated services. However, the Swedish National Audit
Office found that Sweden was in danger of seeing a rise in pathological
gambling. They called for more coherent legislation to take the place of the
Lotteries Act and Casinos Act as well as introducing precise license terms and
giving new powers to a regulatory authority.

The European
Commission brought another action against Sweden in November 2013, stating that
their exclusive right to offer services in the market does conflict with
Article 49 of the European Commission Treaty. Sweden’s reactions to the
Commission’s requests were not deemed to be satisfactory in October 2014, so
the Commission referred Sweden to the Court of Justice of the European Union.
Finally, on 24 September 2015, Sweden’s Minister of Public Administration
Ardalan Shekarabi announced that the government would investigate the abolition
of its gaming monopoly and in its place, introduce a Swedish licensing system.

2019: A new Swedish market

Following the
acceptance of the bill ‘A Re-Regulated Gambling Market’, Sweden is set to have
a liberalised gaming regime as of 1 January 2019, which will allow
international operators to apply to offer their services in Sweden. The country
shall be open for license applications to the Swedish Gaming Authority as of 1
August 2018.

Online sports
betting, bingo, casino, and other digital products are open to those applicants
who qualify for a license. Sweden does, however, reserve control over all
land-based casinos, major lotteries, and gaming machines outside of land-based
casinos. Operators can apply for a license of up to five years in longevity,
and there will be an 18 per cent tax on gaming revenue. The operators must also
have their servers based in Sweden, but exceptions can be made provided the
operator commits to Sweden’s inspection policies, and the location is deemed
acceptable.

The two primary
focuses of the new statute are player safety and the punishment of unlicensed
operators. To ensure customer protection, all online players must be required
to set deposit limits and be able to block themselves from all gambling
activities. Also, operators cannot offer players credit, nor can they offer
bonus offers outside of the first-time new customer offer. The legal age of
gambling at an online casino is 18-years-old. With this, operators are not allowed
for their sponsorship of a sports team, such as a logo or slogan, to appear on
products that are intended for minors, such as youth-sized football shirts.

The regulatory
body Lotteriinspektionen can compel internet providers to mark unauthorised gambling
websites, as well as, require financial institutions to block payments to and
from websites. The Swedish Gambling Authority has been given sharper tools to
deal with unlicensed operators. Unlicensed operators will be shut out of the
market, and license holders must conduct their activities in accordance with
the law, per Ardalan Shekarabi. Operators offering to Swedish players without a
license, or anyone who promotes an unlicensed service, could face fines and
prison terms of up to six years depending on the intent and severity of the
case.

Swedish safety remains at the heart

Sweden has
firmly stood by its gambling legislation and state-owned monopoly as the best
methods by which they can protect the Swedish public and Swedish society from
criminal activity and gambling addiction. However, Svenska Spel was only seen
to have 19.7 per cent of the market. Swedish laws did not criminalise the use
of unlicensed online casinos, and the government did not block their websites.
So, due to the lack of offering on Svenska Spel’s behalf, many Swedish gamers
sought other websites.

As noted by the
Swedish National Audit Office in 2012, the monopolised state of Sweden’s
gambling market was no longer helping them to achieve their goals of protecting
the public. The new legislation certainly enables Sweden to take back control
and even achieve their initial goals. Shekarabi states that the new laws
strengthen consumer protection while limiting the negative effects of gambling
while giving the Swedish Gambling Authority an enhanced ability to punish those
who are in breach of the legislation. The ban on bonus offers, bar welcome
offers, is a strong display of Sweden’s desire to limit the occurrence of
gambling addiction as the wagering requirements often attached make players
deposit more money if they wish to earn their bonus winnings.

At the heart of
Sweden’s long-fought battle to maintain its gambling monopoly was the belief
that the nation was doing what was best for its residents. However, the
Lotteries Act (1994) and Casinos Act (1999) were created in a time when there
was much uncertainty surrounding the internet and foreign gambling while ruling
in Swedish courts have been unable to apply them in a way that is acceptable in
the modern age. However, Sweden has found a far more powerful method of
protecting its citizens by yielding to the European Commission’s demands and
enforcing a comprehensive set of policies to govern a new, liberalised gaming
market in Sweden.