Swedish warning as unlicensed operators continue to thrive

25 September 2018

Sweden’s gambling regulator says January’s re-regulation cannot come soon enough after new figures show that unlicensed operators continue to make gains over those operating legally.

Lotteriinspektionen figures for the first half of the year show that turnover for the market grew by 1.5% year-on-year to SEK11.2bn (£967.7m/€1.08bn/$1.27bn) after paid earnings. Licensed companies held 73% of the market, with Swedish companies’ SEK8.2bn of trade down almost 2% while non-Swedish firms were up 12.5% to SEK3.0bn.

From January 1, Sweden will introduce a regulated market, with licensed operators taking on the likes of Svenska Spel for the first time. Operators have been able to apply for licences since the beginning of August, with dozens having already submitted their papers.

With Svenska Spel’s turnover down by 1.3%, Lotteriinspektionen analyst Magnus Granlund told iGamingBusiness.com that unlicensed operators’ gains would only continue in the months leading up to January.

“The long-term trend continues with the regulated market losing ground to the operators without Swedish permit,” he said. “This general trend is likely to continue for the next two quarters.

“Marketing is expected to increase in the lead up to January, which could imply even stronger growth in GGR, especially for the operators without Swedish permit.

“It also shows the importance of a re-regulation of the Swedish gambling market with a new gambling law and a license system coming into force. The massive advertising for operators without Swedish permits also affects the outcome.”

Svenska Spel’s turnover was at SEK4.3bn, with land-based games decreasing by around 9% while online games increased by close to 25%. ATG, the Swedish Horse Racing Totalisator Board, traded SEK2.0bn, an increase of almost 2%, with land-based games down 9% and online games up almost 10%.

While unlicensed operators continued to increase market share, Granlund said they may not be completely satisfied with their performance, particularly as Q2 included the first two weeks of the Fifa World Cup.

“The operators without Swedish permit, who usually show double-digit growth numbers, came out a little bit weaker the second quarter 2018 than one could have expected considering the heavy marketing and events such as the World Cup - albeit some of the effect of this probably will be seen in the numbers for Q3,” he said.

“ATG has shown stable growth despite increased competition.”

The marketing clout of unlicensed operators has long been a concern for Lotteriinspektionen. Earlier this month the regulator claimed victory when the Chamber of Commerce civil court ruled that the country’s two leading newspapers cannot provide links to unregulated offshore companies.

Image: Frankie Fouganthin