Evaluation of the reregulation of the gambling market – Interim report 4: Second year of the new gambling regime
On 1 January 2019 Sweden changed to a new gambling regime. In this report we call this the reregulation of the gambling market. The Swedish Agency for Public Management (Statskontoret) has been commissioned by the Government to monitor and evaluate the reregulation. This is the fourth of our five interim reports.
Public control has decreased compared with 2019
Statskontoret noted in its previous interim report that public control of gambling has increased. The level of channelling had increased from under 50% before the reregulation to 88% in 2019. The level of channelling measures what share of gambling in the competitive sub-market takes place with companies licensed in Sweden.
The level of channelling in 2020 was estimated at 85%, i.e. slightly lower than in 2019. Ahead of the reregulation, the Government’s assessment was that the level of channelling could be at least 90%. We also see that the Swedish Gambling Authority and the judicial system have difficulty countering gambling by Swedes on sites not licensed in Sweden. We therefore make the assessment that measures will be required to strengthen public control of gambling.
Better protection for gamblers but there are areas for development
In our previous interim report, Statskontoret highlighted that the reregulation had improved consumer protection in the gambling market in several respects. In this interim report we note that there are signs that gambling companies licensed in Sweden have become better at following the gambling regime. At the same time, there are still shortcomings in the work of gambling companies on responsible gambling and in their marketing.
In this report we point out that the gambling companies’ duty of care can function better if the expectations on gambling companies are clearer. Their duty of care means that the gambling companies have to counter excessive gambling among their customers. We also stress that Spelpaus.se, where gamblers can self-exclude from gambling, fills an important function. But some individuals who have self-excluded continue to gamble with companies not licensed in Sweden. There are also signs that some self-excluders refrain from or postpone seeking health care and support even though they need to do so.
The situation in ten areas in 2020
We are following the effects of the reregulation in nine areas, each of which has a chapter in this report. This time we also have a separate chapter on supervision of the gambling market.
Development of the gambling market
In 2020, gross gambling revenue (GGR) in the gambling market totalled SEK 27.3 billion. GGR have increased slightly compared with 2019, even though GGR have decreased in several forms of gambling that require the physical presence of the gambler. In the past year 56% of Swedes have gambled for money. We see no signs that the reregulation has had a clear impact on the share who gamble.
Channelling in the gambling market
The level of channelling was estimated at 85% in 2020. This means that around 15% of gambling by Swedes in commercial online gambling (such as online casinos) and betting that takes place at gambling companies not licensed in Sweden.
Central government revenue from gambling
We estimate that central government revenue from gambling totalled SEK 7.5 billion in 2020. This is much higher than in 2019. It is also higher than in the years before the reregulation. The main reason for the difference between 2019 and 2020 is that Svenska Spel decided not to distribute its surplus for 2019 to the Swedish State. Svenska Spel’s board has proposed a dividend of SEK 3.2 billion for 2020.
Non-profit organisations' revenue from gambling
Revenue from gambling for purposes in the public interest totalled around SEK 1.5 billion in 2020. This is a small increase compared with both 2018 and 2019. The large national lotteries (such as Postkodlotteriet) have performed best. Small national lotteries and bingo show lower surpluses in 2020 than in 2018 and 2019.
Consumer protection in the gambling market
Gambling companies still think that the provision in the Gambling Act concerning their duty of care is hard to interpret. In general, the companies have got better at following the rules concerning bonus offers and marketing, for instance. At the end of 2020 almost 60 000 individuals had self-excluded from gambling on Spelpaus.se. Expenditure for gambling advertising in traditional media has halved compared with 2018.
Public health and gambling
The scale of risky gambling, i.e. gambling that has resulted in one or more negative consequences for the gambler, has not changed to a noteworthy extent in recent years. The exception is men aged 18–29 years. There the share showing signs of risky gambling has increased between 2018 and 2020. Up to now the pandemic has not led to increased gambling problems in the population as a whole. But there are signs that the pandemic may have worsened the situation for some individuals who already had a gambling problem.
Crime and crime prevention work
The number of reports to the police of unlawful gambling has increased in 2020 compared with 2019. But it is still difficult for the Swedish Gambling Authority and the Swedish Police Authority to get at gambling companies not licensed in Sweden that target Swedish customers. Match fixing has become less common in 2020, probably because betting has decreased on account of the pandemic. At the same time, many actors see signs that match fixing is a growing problem.
The provisions of the Gambling Act on the processing of personal data are framed in general terms. This means there is a risk that gambling companies have difficulty interpreting the Act. The Swedish Gambling Authority also suspects that in certain cases gambling companies use data from Spelpaus.se in ways other than what is permitted under the Gambling Act.
Costs for government agencies
Statskontoret estimates that government agencies’ costs in 2020 for work related to the gambling market totalled SEK 89 million. Our assessment is that the increase in costs of SEK 19 million between 2018 and 2020 is a consequence of the reregulation of the gambling market. It is mainly the Swedish Gambling Authority that has costs due to the reregulation.
Supervision of the gambling market
The Swedish Gambling Authority has been an active supervisory authority after the reregulation. But in Statskontoret’s assessment, it can do more to guide the industry. For the Swedish Consumer Agency the marketing of gambling has become a priority area after the reregulation. The division of supervisory responsibility between the Swedish Gambling Authority and the Swedish Consumer Agency works well according to the agencies.
In this report we make the following recommendations:
- The Swedish Gambling Authority should increase knowledge about unlicensed gambling.
- The Swedish Gambling Authority should review how the interaction with other measures can be improved in conjunction with self-exclusion on Spelpaus.se.
- The Government should commission the Swedish Gambling Authority to investigate software that blocks online gambling.
- The Swedish Gambling Authority should develop its methods of providing guidance for the gambling industry.
- The Swedish Authority for Privacy Protection (IMY) should consider whether it needs to start supervision of how gambling companies process personal data.