Sweden’s online gambling regulatory overhaul fails to rein in rampant unlicensed operators

The recent report from Sweden's gambling regulator highlighting issues with unlicensed online gambling raises essential questions for regulators worldwide, reports a journalist from New Zealand. As covered by FocusGN [1], the Swedish gambling authority Lotteriinspektionen has warned that up to 30% of the online gambling market in Sweden may be unregulated.

This article analyzes the potential impact of this report and what it could mean for the global gambling industry. According to the original piece published on the 26th of November 2023, the Lotteriinspektionen report estimates that unlicensed gambling turnover reached up to SEK 5 billion over the past year. This equates to roughly NZ$730 million, representing a sizeable chunk of revenue that needs to be appropriately monitored or taxed.

The news has broader implications in the context of Sweden's reorganization of its gambling industry in 2019. A new regulatory framework was introduced to increase consumer safety and channel gambling to licensed sites. However, the inspector now admits that the reforms have not stemmed unlicensed gambling as intended.

The FocusGN article notes that this news will likely "embolden calls for greater enforcement measures and extra sanctions" for unlicensed sites accessible in Sweden. The development indicates issues with enforcing regulations in an increasingly digital industry. Other countries looking to overhaul online gambling similarly must consider innovative technological solutions.

The news raises financial concerns regarding lost tax revenue and consumer safety with unregulated sites. Sweden applies an 18% tax rate on licensed gambling revenue, meaning the unaccounted NZ$730 million this past year represents lost taxes for funding public services. Further, without oversight, unregulated sites may lack responsible gambling measures or consumer protections.

While the context concerns Sweden's regulatory framework, the challenges are global. Countries worldwide grapple with balancing technological innovation in gambling with responsible oversight. As online betting crosses borders, regulators must coordinate to enforce standards, while advertisers and operators require more stringent codes of conduct regarding where ads are shown.

With online gambling revenue growing at over 11% annually, the industry is only becoming more complex to govern. Sweden's admission of deficiencies in its regulatory regime points to the need for ongoing evolution of guidelines and enforcement tactics. Striking the optimal balance poses a shared quandary for regulators in New Zealand and globally.