The modern iGaming market is notoriously competitive, made even more so when taking into account the regulatory landscape. In jurisdictions such as Sweden, some believe that the current level of legislation means that the value of holding a Swedish license is in danger of being diminished.
Gustaf Hoffstedt, Secretary-General of BOS gives iGamingFuture some insight into why he believes some industry stakeholders may view the Swedish license this way and what can be done to improve the situation going forward.
We’ve seen that Sweden has not pursued unlicensed operators since January 2019, and at the same time, they have issued a total of 26 fines to licensed operators amounting to a huge total of 236.4 MSEK. What impact does this have on the future of the market?
“The message I receive from Malta is that the operators, in particular the ones smaller, view the Swedish license as something voluntarily.
They compare the pros and cons of having a Swedish license, and typically the smaller operators conclude that they prefer to run their Swedish operations without a Swedish license.
There are of course several reasons for that, and a key one is the interpretation of the law. This is a huge challenge for those of us trying to safeguard the Swedish licensing system.
Sweden also doesn’t use B2B licenses like the UK, for example. This is another disadvantage in protecting channelisation.
The government have focused so much on the licensed operators. The fines are huge compared to the actual infringement they are issued for.
The only reason for the government to talk about the licensed operators is to say something bad about them.
The government is arguably the most important stakeholder of all, and those negative signals are received by the banks, by the customers and the whole ecosystem.
That has a truly negative impact on the licensed operators and their possibility to operate in Sweden.”
The temporary measures recently implemented in Sweden have received mixed opinion based on the amount of industry scientific data advising against their changes. Is there enough transparency between iGaming service providers and the regulators? How can we improve communications and what impact will this have?
“Clearly, the dialogue is not good enough.
Although, we as the trade association, have monthly dialogues with the Government. That is of course something that we appreciate a lot.
One reason why the government could come out with it with a false statement (that online casino was rising) was due to the technical fact that Swedish license holders do not divide sports betting and online casino when reporting to the gaming authorities.
They report to those gambling verticals together.
I believe it would be hugely beneficial should it be mandatory for gambling operators to split how they report to the two Swedish authorities. We are in great need of facts.
It’s also important that authorities, as well as the government, can maintain a calm approach. For example, the Danish gambling authority had the patience to actually await the numbers regarding whether online casino had increased or not.
After they had the facts, they took the decision to not impose particular restrictions due to the fact they didn’t have any rise in gaming.
I believe it’s extremely important that we abandon decision-making based on feelings and a finger-in -the-air approach. It’s important that we actually acknowledged the importance of fact-based decision-making.
At times, it’s quite lonely representing the international gambling industry. It’s lonely in the sense that we do have a reputation problem and few stakeholders, outside of our own circle, have a love for the international online gambling industry,
But lately, we have actually seen a shift here in Sweden.
New stakeholders acknowledge and recognise the same problems that we’ve been talking about for quite some time.
The most recent change, and the possibly the most important one, is that gambling addiction associations report the same conclusions as we do.
For example, the Stockholm branch of the Swedish National Gaming Addiction Association went out recently stating that the majority of their clients (the problem gamblers) have received their problems from unlicensed gambling.
Another institution that works with problem gamblers, and they state that seven out of 10 of their clients continue to gamble even though they are all in the self-exclusion system.
Since the self-exclusion system only works with licensed operators, it’s tempting for problem gamblers to gamble with unlicensed companies.
We are making new friends, so to speak, when it comes to safeguarding the licensing market.
I fully understand that gambling legislation and regulation is difficult, and the goal must be to get to a point of balance. The balance needs to be around offering the maximum amount of customer protection whilst also letting the punters gamble within the licensing system with their own free will.
The Swedish failure is that very few stakeholders are concerned with whether the punters are actually interested in gaming within the Swedish licensing system.
The authorities, the politicians, and the other stakeholders have just repeatedly added measures that, upon first glance, look good from a customer protection perspective.
The impact was that the punters didn’t want to be in the licensing system.”
Editor’s Note: From speaking with Gustaf it’s clear that even with the current channels of dialogue available for industry stakeholders to communicate with government, there is still a need for a greater focus on data collection in order to create more balanced policies.
Even with new information provided by industry associations such as the National Gaming Addiction Association suggesting that problem gambling is most apparent with unlicensed operators, there still seems to be more regulatory focus on the licensed ones. Gustaf believes the regulatory authorities have lost sight of the end-user – the customer, and this is the greatest danger to Swedish iGaming.
Hopefully, with increased communication and data sharing between authorities and industry associations things will improve in the future.