Svenska Spel chief calls for ban on lottery betting

28 November 2019

Svenska Spel president and chief executive Patrik Hofbauer has called for a ban on the lottery betting industry in Sweden, describing the continued legality of the business model as “incomprehensible.”

In a statement posted on Svenska Spel’s website yesterday (27 November), Hofbauer argued that lottery betting operators’ business models would not be permitted in other industries.

“It is incomprehensible that [lottery betting] may continue,” Hofbauer said. “I can't think of any other industry where it's okay to use competing companies' products as their own business. The shadow gaming companies cannibalise on well-known lotteries without owning the brands themselves that they market and sell.”

Hofbauer said he hoped that this complaint is addressed when the Swedish Gambling Market Investigation Board (Spelmarknadsutredningen) presents its results of an investigation into the country’s re-regulated market, which opened on 1 January 2019.

Hofbauer added that he felt that lottery betting, which he referred to as “shadow gaming,” is confusing to customers, who may not realise that they are not simply playing the lottery itself.

“‘Deposit 25 SEK and get 100 SEK to bet on Lotto’ advertises, for example, one of the shadow gaming companies,” Hofbauer said. “Only further into the site does it become - hopefully - clear to the player that it is not Svenska Spel's Lotto or another lotto draw but you are betting on the outcome of the lottery. The shadow game companies simply go low on incorporated brands.”

“At the same time, it is very doubtful if customers understand what kind of game they are participating in. You should almost be a game technology expert to understand what betting on the outcome of lotteries means.”

Hofbauer said the investigation was important as major reforms such as the Swedish re-regulation can include unintended consequences.

“When the new Gaming Act was announced in Parliament in 2018, an investigation was also set up to monitor the effects,” Hofbauer said. “It was a wise decision. As the conditions for a market are fundamentally changed, it is necessary, after a while, to verify that the reforms have really provided the positive effects that the Riksdag [Sweden’s legislature] and the government have wanted to achieve.”

“I think everyone is aware that there are sometimes negative side effects of major changes. Often it is about rogue players seeing an opening that the legislature had not foreseen. This does not mean that the re-regulation in itself is bad, only that it is extremely difficult to predict in advance all conceivable loopholes.”

Hofbauer said he believed that lottery betting companies also violate the Swedish Gaming Act, which declares that the lottery market should be reserved for public benefit and the state.

Hofbauer cited the example of Denmark as one country which already has banned lottery betting.

In October, Hofbauer gave his backing to a ban on betting markets that can be influenced by a single player in a match, such as corners and yellow and red cards.