Renowned globally as forward-thinkers, Sweden’s reformed gambling bill follows the same blueprint. The end of Svenska Spel’s monopoly, which comes into force in January 2019, will open up a market where operators will find fruitful revenue opportunities. Other bonuses include friendly licence costs and serving a nation which excels in the digital world. Keep reading to discover Swedish players’ behavioural trends, how you can comply to the bill and why you should think about expanding north.
How is the bill unique?
There is a big emphasis on customer protection and operators hold a large share of the responsibility in complying with this. As quoted from Government.se, “There must be stronger consumer protection in place for gambling.”
Operators should pay particular attention to the below proposals:
• “Licensed operators must have a comprehensive duty to protect players from excessive gambling.
• Strict requirements for moderation in marketing gambling will apply.
• Promoting gambling without a licence, for example through advertising, will be criminalised.”
The strong focus on player safety and marketing moderation could help to enhance operators’ acquisition strategies. Brands will be able to streamline their campaigns and thus create more effective ones, while the complete shutout of unlicensed sites will allow a greater level of trust to develop between players and regulated operators.
What will be the cost of my gambling licence and how much tax will I pay?
Profitable gaming sites will be taxed at 18%, which is 3% higher than the current rate in the United Kingdom. However, as we discussed in an article for SBC News, the increase of Remote Gaming Duty means that UK gambling tax could rise to as much as 25%. When looking at the long-term picture, Sweden’s proposed percentage could end up being lower.
Operators will pay between 400,000 and 700,000 Swedish Krona (SEK) for a licence. In GBP, this is around £34,500 to £60,364. Compare that to the United States, where USA Today reported the cost of a sports betting licence in Pennsylvania to be an eye-watering $10 million (just over £7.8 million). Tax in the Keystone State is also 34%, so Sweden is considerably more cost-effective.
Why is Sweden a big opportunity for gambling operators?
Swedish gaming revenue is growing. As reported by Lotteriinspektonen, gross gaming revenue in the first three quarters of this year was 1.2% higher than the same period in 2017. There is a clear audience for online gambling in the Scandinavian nation, but it’s worth noting that unregulated operators hold a sizeable market share. However, as payments to said websites will be blocked under the new bill, licensed operators could benefit from these customers choosing to play with them instead.
Swedes are also excellent with technology. Broadband speed is the second-quickest in the world, according to the Guardian. Internet penetration also stands at just under 95%, according to Internet World Stats. Operators will be able to reach a sizeable player pool, with relatively high disposable income. The most recent statistics on Focus Economics show that the country’s current GDP per capita, which is over $53,000 (£41,000), is set to increase further in 2019. This makes Sweden a promising market to do business in, both now and in the future.
What verticals are popular?
Players wager the most on sports betting (44%) and casino (38%), according to iGaming Business’ Sweden e-zine. Bingo, at 11% has the third-largest market share.
How are payments processed in Sweden?
Bank transfers are popular in the Swedish gambling space and many brands across the country allow players to instantly withdraw winnings to their accounts. In terms of card schemes, both Visa and Mastercard are also widely-used.
Many merchants who enter this market might fear that offering 3D Secure payments could slow down the depositing process. However, with the incoming enforcement of PSD2, customers might not even notice a difference in speed.
To summarise…
The opening up of the Swedish online gambling market is a big opportunity for local and international operators alike. Not only is gambling in the country continuing to grow, but they also provide a well-developed digital infrastructure which is constantly evolving. The bill’s player-first approach will help to build trust between players and operators, while PSD2’s introduction will also help operators to offer high-speed payments without sacrificing user experience.