Online Gambling Drives Q1 Growth in a Transforming Swedish Market
Published June 5, 2017 by Lee R
Social benefit is the ultimate goal of any regulation system, including high tax Sweden's.
With a breakup of the often criticised Swedish monopoly on the near horizon, online gambling is driving growth in that major market through Q1.
Q1 Result
Overall, the Swedish market shows a 0.2% year-on-year increase in the gaming market for Q1 2017 to SEK 5.4bn (€553.6bn/$622.5bn).
The Breakdown
According to Swedish gambling regulator Lotteriinspektionen, the patronage from Swedish-based gaming players dropped 3% in providing SEK 4.2bn, while non-Swedish patronage increased 13% to sales of just over SEK 1.2bn.
Individual Performance
State-owned Svenska Spel reported sales of SEK 2.16 bn. The year-on-year decrease of 5% was weighted down by a land-based decrease of 9% while online gaming increased by 6%.
Another operator, ATG, maintained stabilised year-on-year sales of slightly more than SEK 950m for Q1 2017, with land-based games decreasing by 11% and internet games increasing by 10%.
Lotteries
Lottery Svenska Postkodföreningen increased 3% year-on-year for Q1 to sales of just over SEK 623m, with Folkspel, Bingolotto and Sverigelotten decreasing by 10% year-on-year to SEK 140m in sales.
Impending Demonopolisation
The major development in the Swedish market is the pending removal of the Swedish gaming monopoly, which is set to be replaced with a licensing system calling for a uniform 18% tax of new licensees to the Swedish market.
Was the Monopoly so Bad?
While much has traditionally been made of the apolitical stance that a state-run monopoly inevitably presents, it is interesting to note the social process of the Swedish system before rushing to judgement.
Tracing the Money
The Swedish Gambling Authority’s Lottery overview report in the last full year before the opening of the market was announced, 2016, provided a trail of the money collected by the government. In the report, the SGA explained that profits from lotteries go mainly to “national movements, equestrian sport and the State,” with the public benefits of these disbursements experienced in through money being disbursed by the state to non-profit associations and then “primarily to sporting activities for children and young people.”
Overview
The move to an increasingly transparent system of disbursement should encourage more applicants despite a relatively high tax, so that new operators as well as existing Swedish operators can enjoy the benefits of the market while contributing to the social good that the removal of the monopoly is supposed to bring.
