Is It Time to Privatise Svenska Spel?

The Swedish gambling industry faces a pivotal moment as calls for Svenska Spel’s privatisation grow louder than ever.

Gustaf Hoffstedt of the Swedish Trade Association for Online Gambling argues that government ownership undermines market fairness.

With mounting financial struggles and regulatory fines, privatising Svenska Spel could promote impartiality and competitiveness in the gambling market.

Explore the case for Svenska Spel’s privatisation and the potential impact on Sweden’s regulated gambling industry.

Calls for Svenska Spel Privatisation Intensify Amid Market and Regulatory Challenges

Key Points:

1. Calls for Privatisation Renewed: BOS head Gustaf Hoffstedt highlights conflicts of interest in the government’s dual role as regulator and operator.
2. Svenska Spel’s Declining Performance: Net revenue drops and fines illustrate operational and regulatory challenges facing the state-owned gambling operator.
3. Market Dynamics at Play: With 70 private operators in Sweden, critics argue that state ownership hinders fair competition and market efficiency.

Privatisation Debate: Svenska Spel Under the Spotlight

The debate over the privatisation of Svenska Spel has resurfaced as Sweden’s gambling market grapples with challenges. Gustaf Hoffstedt, head of the Swedish Trade Association for Online Gambling (BOS), has reiterated his call for the government to sell its stake in the state-owned operator.

In a recent op-ed, Hoffstedt argued that the government’s role as both regulator and operator creates inherent conflicts of interest. He drew parallels to Sweden’s privatisation of Bilprovningen, a state-run vehicle inspection firm, noting that the same principles of fairness and impartiality apply even more critically to the gambling sector.

“The government’s involvement in Svenska Spel compromises the integrity of the regulated gambling market,” Hoffstedt wrote. “A level playing field is crucial for a competitive and transparent industry.”

This renewed call comes amid Svenska Spel’s financial struggles, regulatory fines, and the broader trend of privatising state-owned enterprises in Sweden.

Historical Push for Privatisation

The idea of privatising Svenska Spel is not new. A 2017 government investigation questioned the necessity of state involvement in a market crowded with private competitors. The report highlighted that Svenska Spel operates no differently from any other market participant.

In 2021, Hoffstedt echoed these sentiments, pointing out that the state’s ownership lacked justification in a competitive gambling landscape. He further noted that Svenska Spel’s performance, particularly in its land-based operations, has lagged behind private firms.

Financial and Operational Challenges

Svenska Spel’s recent financial reports reveal significant challenges:

• Revenue Decline: The company reported €161 million in net revenue for Q1 2024, a 1% drop year-on-year.
• Casino and Vegas Struggles: Revenue from its Casino Cosmopol and Vegas divisions fell by 32%, driven by closures in Malmö and Gothenburg.
• Regulatory Fines: Svenska Spel faced fines exceeding SEK100 million in 2024 for multiple violations of Sweden’s Gambling Act.

Despite these setbacks, there are bright spots. Svenska Spel’s online business grew by 6%, contributing 56% of total revenue. Additionally, the Lottery division, Tur, saw a 6% rise in net gaming revenue, thanks to strong performances from Eurojackpot and Triss scratch cards.

The Case for Privatisation

Proponents argue that privatising Svenska Spel would eliminate conflicts of interest and foster fair competition. With approximately 70 private operators competing in Sweden, critics contend that the government’s involvement skews the market.

Moreover, Hoffstedt and others believe that private ownership would drive innovation and efficiency, enabling Svenska Spel to better navigate the evolving gambling landscape.

The growing calls for Svenska Spel’s privatisation reflect deeper questions about the role of state ownership in competitive markets. With declining revenues, mounting regulatory fines, and a dynamic gambling landscape, many see privatisation as a necessary step to ensure fairness and market growth.

As Sweden continues to redefine its gambling industry, the decision on Svenska Spel’s future will serve as a litmus test for the government’s commitment to impartiality and progress. The question remains: is now the time to let Svenska Spel join the ranks of Sweden’s privatised enterprises?