The Swedish Trade Association for Online Gambling (BOS) has released a report by Copenhagen Economics (CE) analyzing the potential impacts of the recent tax increase on gambling from 18% to 22%, effective July 1st.
Key findings from the report include:
- The tax increase is expected to reduce the market share of the legal, regulated gambling sector by 1.2 to 2.5 percentage points. This loss in the regulated market will likely be absorbed by the unregulated gambling sector.
- In terms of individuals, this shift means that approximately 2,881 to 6,085 people might turn to unlicensed gambling alternatives.
- As a consequence of the increased tax, 591 to 1,247 individuals may develop gambling problems due to the shift towards unlicensed gambling, which lacks statutory consumer protection.
While the Swedish Ministry of Finance anticipates an increase in tax revenue of SEK 539 million annually, Copenhagen Economics estimates the actual increase will be significantly lower, ranging between SEK 214 million and SEK 399 million. - These findings suggest that the tax increase could have unintended consequences, including a rise in the number of individuals engaging in unlicensed gambling and a corresponding increase in gambling-related problems. The report underscores the importance of considering these factors when evaluating the overall impact of tax policy changes on the gambling industry.
“At the price of a modest net addition to the treasury, the tax increase creates around one thousand new cases of people with gambling problems. Thus, gambling problems would never have occurred without the increase in the gambling tax. The government should completely overhaul its gambling policy and instead protect and strengthen the legal gambling market, which offers the consumer the protection all gamblers should be able to enjoy,” says Gustaf Hoffstedt, Secretary General, the Swedish Trade Association for Online Gambling.
