Evaluation of the Reregulation of the Gambling Market: Interim Report 3 (2020:8)
On 1 January 2019, the Swedish gambling market was reregulated and new gambling legislation was introduced in the form of the Swedish Gambling Act (SFS 2018:1138). According to the Swedish Government, the reregulation of the gambling market should provide better conditions for achieving the objective of a sound and secure gambling market under the control of public authorities. The Swedish Agency for Public Management (Statskontoret) has been tasked by the Government with monitoring and evaluating reregulation until 2020. In this third interim report, we review the development of the market during 2019.
Public control of the gambling market has increased
Reregulation has increased public control of the Swedish gambling market in comparison to the situation prior to reregulation. Today, a significantly higher percentage of Swedes' gambling takes place with companies that are licensed in Sweden and have undertaken to comply with Swedish gambling legislation. The license system has provided the State with better tools for supervising and governing gambling companies and gambling; for example, suitability assessment and ongoing supervision of the companies operating on the market and the self-exclusion register Spelpaus, with requirements for gambling companies to offer gambler's the opportunity to bar themselves from placing bets.
Work to counter unlawful gambling must be prioritised
The State needs to utilise the improved toolbox if reregulation is to succeed and eventually achieve the goals for the gambling sector. One vital element of this is to ensure that unlicensed gambling companies are excluded from the market. For various reasons, the Swedish Gambling Authority has yet to use the tools warning notification and payment blocking to closedown unlicensed games. As yet, it is therefore not possible to assess the efficacy of these tools against unlawful gambling operations. Statskontoret is of the opinion that, during 2019, the Swedish Gambling Authority has not had as high a profile in terms of excluding unlicensed operators as it has in supervising licensed companies. It is important that the Swedish Gambling Authority prioritises work to counteract unlawful gambling operations, not least given that such activities undermine the possibility of achieving the stated goals for the gambling sector. Among other things, a reduction in unlawful gambling would create better conditions for imposing stricter gambling regulations in circumstances where this is deemed necessary.
There is a need for more information regarding problem gambling
Consumer protection has been strengthened through reregulation. A large number of individuals have been protected from excessive gambling by banning themselves from placing bets; however, this is insufficient to reach all of those who require protection from their own gambling problem. In our opinion, the public requires more information about the ability to self-exclude oneself from gambling and how to seek help with problem gambling. In Sweden, it is above all women who lack knowledge about these opportunities. Despite the fact that women are equally likely to have a gambling problem as men, only one in four of those self-excluding on Spelpaus are women. Women are also in the minority among those contacting the national helpline due to their own gambling.
Fewer opportunities for non-profit organisations to share in gambling revenue
It was not the intention that opportunities for non-profit organisations to share in gambling revenue should decrease after reregulation. Even if the key conditions remain unchanged in several important regards, it is Statskontoret's assessment that greater competition on the gambling market has made it difficult for non-profit organisations to compete for Swedes' gambling stakes. This reduces their ability to gain revenue from gambling. Furthermore, many non-profit organisations are critical of the technical requirements contained in Swedish gambling legislation, which they feel are not adapted to gambling for purposes in the public interest; for example, regarding the gambling systems and drawing equipment used by gambling companies. Statskontoret confirms that costs associated with adapting to these requirements, as well as for certification, are indeed high, especially for small national lotteries and bingo halls.
The situation in nine different areas in 2019
Statskontoret shall evaluate the effects of reregulation in nine different areas. Here, we report on the situation in each of these areas during 2019.
The gambling market's development (Chapter 2)
In 2019, the gambling market had a total turnover of SEK 26.8 billion. It is difficult to establish the change in the size of the market compared to 2018. The market has become more competitive. There has been weak development in those games reserved for the state and non-profit organisations.
Channelling the gambling market (Chapter 3)
During 2019, the level of channelling into the regulated sector is assessed at 88%. In 2018, the level was significantly lower at below 50%. The level of channelling was somewhat lower than 88% during the second half of 2019, and somewhat higher in the first half of the year. Channelling varies from one type of gambling to the next.
The State's revenues from gambling (Chapter 4)
The State's total revenues from gambling in 2019 are estimated at SEK 6 billion, which is in line with 2018. Revenues for excise duty on gambling and corporation tax on gambling companies increased compared to 2018, while revenues from dividends from AB Svenska Spel declined; however, at the time this report was submitted by Statskontoret, the size of the dividend from Svenska Spel had not been determined. This implies that the State's total revenue from gambling may deviate from our estimate of SEK 6 billion.
Non-profit organisations' revenues from gambling (Chapter 5)
In 2019, revenues from gambling for purposes in the public interest were SEK 1.45 billion. Although this is a slight increase on 2018, it is largely due to an increase in revenue from one major lottery. During 2019, gambling companies sponsored sports clubs to the tune of approximately SEK 130 million. This is a slight increase on 2018.
Consumer protection on the gambling market (Chapter 6)
Consumer protection has been strengthened through reregulation. Almost 50,000 people have self-excluded themselves from gambling via Spelpaus. The number of people who have performed self-testing has increased significantly. Gambling advertisements on digital media channels increased during 2019, while gambling advertisements on traditional channels such as television declined.
Public health and gambling (Chapter 7)
Although there are indications that problem gambling in the population may have decreased, data primarily measuring gambling problems is lacking for 2019. The number of people seeking help from the helpline has decreased. Women do not utilise society's support initiatives to the same extent as men.
Criminality and crime prevention (Chapter 8)
There remains a significant amount of unlawful gambling. While certain measures have been implemented to exclude unlicensed operators, the available tools intended for this purpose have yet to be tested. It remains difficult to investigate and prosecute match fixing.
Privacy (Chapter 9)
Gambling companies collect extensive personal data concerning their customers in order to meet statutory requirements regarding player registration and responsible gambling. In 2019, one in four players considered the collection of data concerning their gambling behaviour to be an infringement of their privacy, a somewhat lower percentage than in 2018.
Costs incurred by government agencies (Chapter 10)
Government agencies incurred costs related to the gambling market of approximately SEK 83 million in 2019, of which SEK 70 million was for the Swedish Gambling Authority. Costs accruing to government agencies increased by SEK 15 million year over year. This was due to a greater number of assignments related to the gambling market.
Although it is not explicitly stated in Statskontoret's assignment that we should submit proposals, we hereby make the following recommendations based on our conclusions and observations of the gambling market during 2019:
- The Gambling Market Commission should propose additional measures to counter unlawful gambling operations.
- The Government should initiate a public information campaign regarding consumer protection.
- The Swedish Gambling Authority should conduct a review of current technical requirements without undue delay.
- The Swedish Gambling Authority should further develop the method for calculating the level of channelling.