Regulation in Sweden 2019
Sweden is finally preparing to put into effect the provisions of its much anticipated “Re-Regulated Gambling Market” legislation. The Government’s quasi-monopoly on gambling services ends with the introduction of a licensing framework for international gambling operators, including in the online space. The new rules are due to enter into force in January 2019.
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The new regulations
In accordance with the law, all gambling activities in Sweden are divided into three broad categories: the competition sector, the government sector and the non-profit sector. All online gambling will be included in the contest area. The government sector will consist largely of state owned stationary casinos. The nonprofit sector includes nonprofit bingo and similar efforts.
All companies wishing to offer gambling services in Sweden must obtain a valid license from the lottery inspection. Depending on the type of gambling, there are six different license categories. The fees for a five-year license range from 400,000 Swedish kroner (43,900 USD) to 700,000 kroner (76,800 USD).
Licensed gaming is taxed at 18%, except for charitable activities that are not taxed at all.
The new legislation contains fairly strict responsible game elements. Players can exclude themselves from all licensed operators by taking a single step through a central system called Spelpaus.se (“Spel Paus” is roughly referred to as “Play Break”). In addition, the gambling companies themselves have a duty to prevent “excessive gambling.” The minimum age for gambling is 18 online and 21 on land.
A client’s unfriendly mandate of the new law is that gaming companies can only spend a single bonus on a new player; H. A welcome bonus. Reload bonuses, VIP match specials and certain other perks are prohibited. On the other hand, in the eyes of the authorities, each licensed entity is considered a new gambling site, so existing users of currently unlicensed Internet gambling services can re-sign up and receive new bonuses as soon as those gambling sites receive the appropriate licenses.
It is illegal to operate an unlicensed gambling studio, offline or online, and the penalty for such a crime can be up to six years in prison plus a fine. It is also forbidden to advertise such illegal gambling services at all. Any Swedish citizen who attempts to access the websites of a black market gambling company will be warned that the website is not properly licensed by the Swedish authorities.
The payment process is also affected. It is planned to block transactions between Swedish citizens and recipients of unauthorized gambling. However, in the past, the effectiveness of such strategies has been questionable in other countries and, in fact, such barriers could not really be implemented. In addition, today’s crypto-currency innovations, such as Bitcoin, make it possible to bypass almost all attempts to disrupt free cash flow.
The angle of the European Union
Despite Shekarabi’s comments suggesting that there is a desire to take control of the market underlying Swedish licensing efforts in Sweden, there is indeed more going on here. Indeed, Sweden is following pressure from the European Union to liberalize its gambling laws in order to meet its contractual obligations.
Already in 2007, the EU warned Sweden that its gambling statutes, which more or less constituted a government monopoly in the industry, needed updating. Sweden has done essentially nothing in the next few years, and in October 2014, the EU Commission sued the Scandinavian country to meet its international obligations. Finally, Sweden decided to seriously consider changing its gambling regulations, and the result was the law “Regulated Gambling Market”.
Many big sites want the license
Due to the low tax rate of 18%, the very reasonable licensing fees, the lack of clauses for bad actors and the fact that operators are not obliged to set up local offices in Sweden, there was a veritable rush of applications. So far, at least 75 companies have submitted their license papers to the Swedish Gambling Authority since they submitted proposals on August 1, including well-known companies such as Betsson, ElectraWorks – the parent company of PartyPoker and Bwin, 888 and many other big names.
The UK tax rate of 15% is below the Swedish tax rate of 18%. However, this will change shortly as the higher UK remote tax liability is introduced. In addition, the UK Gambling Commission has in the past imposed extremely criminal fines on entities alleged to have breached the rules, such as the £ 2.2m fine that Paddy Power Betfair had to pay and against 32 Red’s verdict of two million pounds.
The Swedish gambling authority (lottery inspections) is preparing for the increasing responsibilities. Her name is changed to “Gaming Inspectorate”. In addition to this seemingly cosmetic change, General Director Camilla Rosenberg has increased the workforce to 50 full-time jobs and is expected to hire more new employees shortly.
However, some observers believe that the regulator can not cope with the demand for licenses without significant delays and possibly errors. Rosenberg has requested applicants to correct any inaccuracies in their records and to submit the missing material as soon as possible in order to avoid delays in issuing the permit.
She also mentioned that the exact rules for responsible gaming and advertising restrictions are not well defined. Upon request for further elaboration of these items, she stated that they will be resolved by the justice system as soon as possible. Such an attitude undoubtedly calls into question the readiness of the gambling inspection for its extended scope.