Sweden: Sweden's Liberalised Gaming Regime to Return Power to the State

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.

by Denitza Dimitrova, LL.B., LL.M., Mag.Jur. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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