Gambling in Sweden: Re-regulated or deregulated?

Sweden's deregulated gambling market takes off

We have been hearing a lot about Sweden's new gambling law in recent months. That is not surprising, given the historic nature of legislation that promises to forever alter the gambling environment in the largest country in northern Europe. But even as regulators begin granting new gambling licences, one lingering question remains: is the action being taken in Sweden re-regulation or deregulation?

This is no semantic question. For the answer to it really defines the proper role of government in the gambling arena. Two extreme positions on the government's role are obvious. One extreme says that government should be completely in control down to micromanaging, and possibly even owning, every gambling establishment in the country. The other extreme is one of a complete hands-off approach in which the government is in no way involved in anything relating to gambling.

As with most things, neither extreme works well in the real world. So the Swedish government believes it has at least some role in regulating both land-based and online gambling. What that role is remains to be seen. With a new gambling law that went into effect as of 1st January 2019, the Swedish government is once again exploring its own responsibilities to simultaneously guarantee gambling freedom and the safety of the gambling public.

Gambling in Sweden is not new

The activity of gambling is not new in Sweden. History records cultures dating back to the time of the Vikings playing dice games to settle land disputes. You could even make the case that gambling was entertained in prehistoric days. Indeed, gambling seems to be an innate part of human nature.

From an official standpoint however, legal gambling was codified in Sweden in the 1930s when the country's state gambling monopoly was established. Government leaders at that time put control of all gambling in the hands of state-owned operations they believed would bring an end to what was deemed to be illegal betting activity.

Sweden has been operating under a state-owned monopoly since 1934. Therein lies the central question of re-regulation or deregulation. If you believe that the new gambling law breaking up the state monopoly is re-regulation, how would you classify the state monopoly itself? Was it unregulated?

No, it appears as though Sweden's new gambling legislation is more deregulation than anything else. Yes, a set of rules has been put in place to govern the new gambling environment in that country. But at least private enterprise has the opportunity to get involved in what has been controlled by the state for more than 80 years. If that's not deregulation, gambling operators are at least breaking even in the regulatory game.

What the new law does

Prior to passage of the legislation, gamblers in Sweden were limited to state-owned operations hosted primarily by brick-and-mortar casinos. Such limited options in terms of operators also meant limited options in the kinds of games being played. To say that punters did not have the kind of choices in Sweden they have long enjoyed in the United Kingdom is to state the obvious.

The new law we are all talking about changes everything. Here are the four most important aspects of the law:

  • Six new licences are now available to operators.
  • Non-profit gambling activities are not subject to tax.
  • Commercial gambling activities are taxed at 18%.
  • New age limits have been established: 18 to gamble online and 21 to gamble at a brick-and-mortar casino.

The most important of these four points is the availability of the new licences. Offering licences above and beyond state-owned operations is an invitation to private operators in Sweden and international players from all over the world. The licences open the Swedish market to genuine competition rather than allowing the state monopoly to continue.

The six gambling licences

We were curious to know whether or not any of the six licences specifically addressed bitcoin gambling. And when we talk about 'Bitcoin Gambling', we are referencing any gambling activities involving cryptocurrency. So, is there a specific licence for online operators who want to deal only in the crypto space? In a word, no.

Here's a summation of the six licences:

  • State-Owned Games - Applies to state-owned operations offering casino games, slot games, and some lotteries.
  • Public Purpose Games - A licence given to non-profit organisations offering lotteries.
  • Betting - Applies to private operators offering a full range of betting opportunities - e.g., sports book - both on- and offline.
  • Commercial Online Games - A licence offered to online operators offering casino games, slot machines, and bingo.
  • Commercial Land-Based Games - Applies to privately owned operations offering slot games, card games, and casino games in a land-based casino.
  • Cruise Ship Games - Applies to privately owned cruise ship operators offering casino games and slot machines on ships that sail international waters.

Bitcoin casino operations running online gambling sites would obviously fall under the purview of the Commercial Online Games licence. There is nothing in that licence that specifically addresses bitcoin gambling as compared to making deposits with fiat currency. So that answers that question.

Having said that, there are two unique aspects to the online licence worth exploring further. Both are related to the practice of online casinos offering welcome bonuses.

Tighter control of bonuses

Swedish regulators have made a point of establishing tight restrictions on welcome bonuses. Simply put, online casino operators are restricted to offering only one welcome bonus to new players at sign up. If they plan to operate sites in Sweden, they cannot continually offer multiple bonuses above and beyond the one-time welcome bonus. It is a one-and-done thing.

A second aspect of this is how the Swedish law classifies new players. The law considers all players as new players the first time they sign up with a gambling site based in Sweden. So let's say you used the MegaMoolah.com website in the past to find an online gambling operation based in Malta. You signed up with that website and you have been playing for months.

If you sign up on a Swedish site offered by the same operator, you are still considered a new player under the law. That means you can get the welcome bonus from the Swedish site in addition to any of the bonuses you have already enjoyed on the site in Malta.

So if you want to maximise your bonus sign up to a casino offering a special Mega Moolah bonus.

Bitcoin gambling in Sweden

Knowing what we now know about Sweden's revised gambling laws, we are terribly interested in what is going to happen with bitcoin gambling. There is no reason to believe that operators already accepting cryptocurrency deposits in Malta and elsewhere would not be willing to do the same thing via their Swedish sites. Today, we know of no attempt by Sweden to prevent gamblers from depositing with crypto.

That is not to say regulators have not addressed the cryptocurrency question or never will. We just don't know. But it seems likely that any international operator already active in the cryptocurrency space would bring it to their Swedish operations as well. One example is the Bitcoin Casino where you can play Mega Moolah.

Less government control over gambling

Our discussion now brings us full circle to the re-regulation or deregulation question. If you define regulation as government control, Sweden's new legal environment would qualify as deregulation. Consider this: a state-run gambling monopoly is the ultimate example of government control.

While all gambling operations in Sweden remained state-owned, the government controlled every aspect of gambling and betting. Regulators controlled who got licences, where they could operate, the games they offered, how gamblers could play, etc. You cannot get more controlling than that. Just the simple act of loosening state control in order to invite private enterprise to participate is an act of deregulation.

In that deregulation, Swedish authorities have had to enact a handful of new rules to govern how the private sector participates in the gambling industry. Such rules are a necessary evil in order to protect both the gambling public and the government's interests in state-owned gambling operations.

Main regulatory concerns

The biggest concern, which is usually the case when governments are trying to regulate gambling, is preventing money laundering. Regulators are concerned about making sure that all private sector gambling operations are run honestly, transparently, and fairly. Such concerns are reasonable and expected.

Finally, there is the tax issue. Sweden has followed the UK's lead in generating tax revenues from operators rather than players. An 18% tax may seem a bit steep, but it will provide revenues to cover the cost of regulation, problem gambling, and put a bit of extra money in Sweden's general coffers.

After many years of planning and discussion, gambling in Sweden was completely disrupted on 1st January 2019. Private sector participation is now encouraged in an environment that has been somewhat liberalised. Now we wait to see what happens. In all likelihood, both land-based and online gambling among private operators is going to flourish creating jobs and overall benefit society.

Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.

Next article: Relaxed regulations open Sweden to Mega Moolah and bitcoin