The Swedish Trade Association for Online Gambling (BoS) has sent a letter to the Ministry of Finance, calling for the revision of the existing gambling rules and the moribund market channelization, which has consistently performed below the government-mandated benchmark of 90%.
BoS urges the government to take decisive steps in the matter of channelization
Channelization is the rate that the regulated market uses to determine how many consumers in the country engage in gambling with a licensed operator. Regulators have usually cited much higher figures than independent third-party research.
Even then, Sweden’s latest figures – which peg the channelization rate at 85% - are below the stated target of 90%, prompting a response from the industry body, which has called for a revision of the current rules.
However, the standardized channelization of 85% does not paint the full picture. An important issue is the fact that the casino, which is one of the most important verticals, has shown results between 72% and 82% market channelization.
An independent survey by Yield Sec argues that 71% of the market in Europe is in fact dominated by illegal gambling across both casino and sales. Matej Novota, Head of Casino Research at Casino Guru, said:
"The Swedish Gambling Authority's call for a review of the current regulations is timely. As players exhaust the limited bonuses offered by licensed operators, many are turning to unlicensed offshore platforms for more attractive incentives. If Sweden does not revise its policies to include loyalty programs and bonuses, the regulated market risks losing more players, potentially leading to a further decline in channelization rates in 2025 and 2026.."
This means that while the regulatory efforts have been focused on lessening the clout of regulated and established operators, the offshore market has thrived. BoS’ letter comes at an auspicious moment.
BoS Secretary General Gustaf Hoffstedt has commented on the proposal and outlined what the government should seek to achieve:
"We hope that the government will take to heart the serious situation for the licensed gambling market, most recently confirmed in the Gambling Authority’s report on the proportion of unlicensed gaming in Sweden.
The appointment of a broad inquiry tasked with preventing leakage to the unlicensed gambling market would undoubtedly be this government’s most important measure to protect and strengthen the legal, regulated gambling market, before Sweden goes to the polls in September next year."
Government investigator Marcus Isgren will be presenting a proposal seeking to strengthen channelization by addressing the scope of application of the Gambling Act. While BoS welcomes this initiative and believes it is well-intended, the group also believes a single adjustment to the current landscape would be insufficient to elicit the necessary response.
In fact, BoS believes that a new inquiry should begin, which should specifically seek to improve and strengthen channelization. This should entail fewer rigid rules for the licensed market, including the use of bonuses.
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