Sweden’s Gambling Regulator Faces Scrutiny: National Audit Office Launches Review

Prepare for a groundbreaking investigation that delves into the heart of Sweden’s gambling landscape. The National Audit Office (Riksrevisionen) has officially initiated its comprehensive review of Spelinspektionen, the nation’s gambling regulator. This audit, announced in August, holds the power to unveil critical insights into the regulator’s effectiveness in overseeing Sweden’s regulated gambling market, which made its debut in January 2019. As the audit kicks off, it is set to address pressing concerns raised by key industry players, notably ATG, the Swedish horseracing betting operator. ATG’s recent study revealed alarming statistics about the surge in blackmarket gambling activities in Sweden since 2019, demanding answers and action from regulatory authorities.

In the wake of Sweden’s foray into the world of regulated online gambling in 2019, the National Audit Office (Riksrevisionen) has embarked on a mission of scrutiny. The audit, first announced in August, centers its focus on Spelinspektionen, the nation’s gambling regulator. Its primary objective? To assess the effectiveness of the Swedish Gambling Authority’s (SGA) supervision of the regulated gambling market since its official launch in January 2019.

The commencement of this audit follows a wave of concerns raised by prominent industry players, with ATG, the renowned Swedish horseracing betting operator, taking the lead in bringing critical issues to the forefront. ATG’s recent study, commissioned to shed light on the prevailing landscape of gambling in Sweden, uncovered unsettling revelations. The study found that the rate of traffic directed towards unlicensed gambling sites has surged exponentially, skyrocketing by a staggering factor of ten since the inception of regulated gambling in 2019.

As per ATG’s research findings, channelisation rates—measuring the proportion of gambling activity directed towards licensed platforms—painted a concerning picture. In the third quarter (Q3), channelisation rates for regulated online gambling as a whole ranged from 70% to 82%. Online sports betting, a key segment of the market, exhibited a channelisation rate of 88%, while online casino channelisation lagged behind at 74%. These figures were computed under the assumption that the average spending per visit on unlicensed sites exceeded that on licensed platforms by tenfold. As a result, ATG estimated the unlicensed gambling market‘s annual value to be within the range of SEK3.4 billion to SEK6.7 billion (equivalent to €585.6 million).

Remarkably, ATG’s investigation revealed that Infiniza Limited and North Point Management Ltd emerged as the predominant contributors to illegal gambling traffic during Q3. Notably, Infiniza’s Unlimitcasino.com claimed the top spot with 150,890 visits, followed closely by Infiniza’s Refuelcasino.com (122,135 visits) and North Point’s Quick.bet (108,290 visits).

The audit initiated by Riksrevisionen will delve into two critical aspects of the gambling landscape in Sweden. Firstly, it aims to evaluate how Spelinspektionen has adapted its regulatory framework to fulfill its obligations effectively, particularly in the face of the shifting dynamics in the market. Secondly, it will scrutinize whether the current regulatory system adequately safeguards the interests of consumers. Notably, the gambling sector contributes SEK6 billion in taxes, but the societal cost of problem gambling stands at a staggering SEK9 billion.

Riksrevisionen, in its statement, emphasized, “Expectations for the Swedish Gambling Authority’s supervision are high in the new, reregulated system. At the same time, the authority’s conditions for carrying out supervision have changed.”

The audit comes at a pivotal juncture when the gambling landscape in Sweden has transformed significantly. Before the reregulation, Svenska Spel, ATG, and four major national lotteries commanded over 95% of the market turnover. However, the post-reregulation era welcomed a multitude of new entrants, expanding Spelinspektionen’s supervisory jurisdiction to encompass approximately 600 license and permit holders.

Furthermore, the overhaul in legislation has created a dearth of established practices in the new regulatory landscape.

Riksrevisionen has set September 2024 as the timeline for unveiling its findings, and the gambling industry watches with bated breath as the audit progresses, bearing the potential to reshape Sweden’s gambling regulatory framework.