If the names Svenska Spel and Lotteriinspektionen have no meaning to you in the world of online gaming, then you are in for a bit of a surprise. These are the two most powerful forces in Sweden’s online gaming presence. Correction. They were the most powerful. Sweden announced in a press release it is moving quickly to dismantle and disassemble the online gaming powers-that-be and create a more competitive online gaming environment that will directly affect the online gaming options for all Europeans.
The Identity of Svenska Spel and Lotteriinspektionen
Svenska Spel is the largest government owned casino business, owning more than 48 percent of the online casinos, and with it, raking in more than 48 percent of the country’s casino earnings. Critics called it a virtual monopoly and limiting competition from other European countries.
Lotteriinspektionen is Sweden’s regulatory branch of online casinos. Combining its powers with Svenska Spel created an impossible barrier for new entrants into the online gaming business.
Dissolving the Monopoly Partnership
The October 21st press release stated that Sweden’s Ministry of Finance agreed to conduct a thorough review of its gaming agenda. There were a number of reasons for this move, one of the most prominent being that Sweden’s national policy towards online gaming largely ignored the European Union’s general approach to competition in online gaming.
There are other reasons, including the monopoly’s lack of consistency with the potential social benefits for Sweden and the European Union as a whole. For non-Europeans, to fully understand why this is an issue, read what Svenska Spel states on its own website concerning the purpose of its existence:
“Social welfare is to be prioritized in the development of gaming forms and throughout the business as a whole. The risk of fraud and illegal gaming is also to be taken into consideration, security in gaming management maximized. Regulators must be able to provide efficient and independent control.
Svenska Spel is to maintain a responsible positioning in its marketing which reflects social engagement and prevents it being perceived as overly assertive.”
In other words, the purpose of online gaming in Sweden and other European countries is to prevent illegal gaming from taking hold and creating the opportunity for fraud against the people.
It did not help the cause of Svenska Spel and Lotteriinspektionen that gaming sales were down 5 percent from a year ago.
What this dissolution means for the European online gaming market and for Swedish businesses wanting to get into the online gaming business is essentially an open door and new opportunities for all. Though the process is still in the works, the projected outcome will be that in addition to the dissolution, there will be a government review of the policies of Svenska Spel to determine if any of those policies are responsible for the 5 percent decline in sales.
The perceived threat by the public due to the existence of the current status quo is that of a government monopoly in online gaming. By the creation of the perceived monopoly, officials in the European Union have begun asking whether Sweden should be allowed to maintain its place as a member of the EU given its anti-competition approach to online gaming. It is clear Sweden’s membership is of above average importance to many of its citizens.
Accelerating the Process
While all this is good news for the EU and competition for the iGaming industry in Sweden, there is an existing deadline of September 2018 that Sweden needs to meet to conform the EU’s online gaming standards. Currently, Swedes who want to play online at a Swedish casino can only play if the casino has a Swedish operating license. This sleight of hand, although a bit confusing, ensures that any Swedish online casinos without an operating license cannot profit from its own citizens. It limits the profitability of competing non-licensed online casinos.
There are three licensed casinos in Sweden, all who are doing well financially and have a solid reputation and unquestioned popularity in the country – Svea Casino, Tivoli Casino and Cherry Casino. While their profitability may seem to be a huge advantage in capitalist countries, in countries where the focus is on the social good of a nation, the financial windfalls come under public scrutiny. While the casinos will continue after the rearrangement of powers, they will face more competition and have to compete more heavily for the in-country gamblers.
Given the internal and external political and social pressures Sweden’s Ministry of Finance is under, accelerating the review process seems to be a foregone conclusion. Seeing that 2018 is more than two years away, should the Ministry of Finance decide to delay addressing the issue, an increase of pressure from every side is to be expected. The fact that the European Union is considering booting Sweden from membership shows how important of an issue this is to Europeans at large.
Of course, things take time, and while Sweden needs to act quickly in the matter, it must not act hastily. Though sales at Svenska Spel did drop 5 percent, the operation still brings in a hefty sum of money that does serve the social interests of the country. Suggesting that the existence of Svenska Spel is a bad thing is just as bad as maintaining the status quo. A well thought out middle ground is the objective.