Christmas comes early: Sweden release draft gambling legislation


sweden-online-gambling-legislationSweden hopes to have its new liberalized gambling regime in place by 2019, which will finally allow international online operators the chance to legally participate in the market.

On Thursday, the Swedish government confirmed it had sent a copy of its draft gambling legislation (viewable here, or a shorter summary here, both in Swedish) to the European Commission for vetting. The formal standstill period will end on March 20, 2018 and the government plans to begin accepting applications for new gambling licenses by July with the new market launch date set for January 1, 2019.

Minister for Public Administration Ardalan Shekarabi said the goal of the legislation was to “regain control of the Swedish gambling market.” Recent figures from the Lotteriinspektionen gaming regulatory body show internationally licensed online operators control one-quarter of Sweden’s overall gambling market.

The new legislation reserves state control over land-based casinos, major lotteries and gaming machines outside casinos, but online sports betting, casino, bingo and other digital products such as virtual sports will be open to all qualified applicants.

Licenses will be valid for a maximum of five years, and licensed operators will pay 18% tax on their gaming revenue. The tax rate is within the range that a group of Swedish-facing online operators indicated will achieve the desired ‘channelling’ of punters to Swedish-licensed sites.

Gaming servers must be based in Sweden, although exceptions can be made for operators who hold licenses in a jurisdiction Sweden finds acceptable, or who grant Swedish authorities remote access to conduct inspections. Licensees based outside the European Economic Area (EEA) must establish a representative in Sweden.

The legislation has two primary preoccupations, the first being customer protection. For online play, all players will have to set deposit limits. Operators cannot offer players credit and bonus offers can only be made to first-time customers.

Gamblers must be 18 years to engage in most forms of wagering, except for entering land-based casinos, which will be restricted to those aged 20 or above.

Licensees who fail to observe their license obligations can be penalized as little as SEK 5k or as much as 10% of their annual turnover.

The legislation’s other main focus is punishing unauthorized operators. Lotteriinspektionen reserves the right to compel internet service providers to slap a scarlet letter on any unauthorized gambling domains, while financial institutions would be required to block payments to and from such sites.

Any operators caught offering services to Swedish punters without a license, or anyone who promotes such services, could face fines and prison sentences of up to two years. However, in cases where intention and severity are deemed to be blatant, prison terms will start at six months and can extend to six years.

The legislation will at last allow licensed online operators the freedom to market their wares without fear of punishment, provided they’re not targeting minors. For example, operators who ink sponsorships with sports teams must ensure that their logos and gaming brand names don’t appear on products intended for use by minors.