Sweden’s state-run gambling operator Svenska Spel has dodged an anti-competitive bullet fired by its privately-held online gambling competitors.
Last Friday (13), the Konkurrensverket (Swedish Competition Authority) dismissed a complaint filed against Svenska Spel by Branschföreningen för onlinespel (BOS), the trade group representing Sweden’s independent online gambling licensees. BOS accused Svenska Spel of abusing its monopoly in Sweden’s lottery market to unfairly raise its profile with Sweden’s online gamblers.
Before Sweden launched its regulated online market in January 2019, it forced Svenska Spel to split into three separate units: one that retained the lottery monopoly, one that involved purely land-based operations (Casino Cosmopol & Vegas), while the other included online casino and sports betting (Sport & Casino AB).
The BOS complaint noted that Svenska Spel’s lottery website and mobile app contained references to the Sport & Casino product, including “continuous information” on the need to hold two separate online accounts to access both Svenska Spel product lines, “even to customers who only play lottery games.”
BOS maintained that this ability to promote Svenska Spel’s casino and betting options via the lottery app was a perk that was unavailable to Sweden’s private online licensees. BOS noted that Svenska Spel had increased its investment in its lottery operations with the understanding that doing so would have the intended “spill-over effect” for its Sports & Casino unit.
In announcing its rejection of these arguments, Konkurrensverket noted that Svenska Spel had removed the Sport & Casino mentions from its lottery app and website midway through last year. Svenska Spel also removed any such cross-promotion via video screens at its lottery agents.
But Konkurrensverket’s primary rationale for dismissing the complaint was its view that “branding is not decisive for customers’ choices of gaming companies.” While Konkurrensverket found that Svenska Spel had a strong brand in Sweden, it noted that many of the state-run firm’s private rivals had also been marketing heavily in Sweden prior to the regulated online market’s launch (against the wishes of the local government).
BOS has filed other complaints against Svenska Spel, including one with the Consumer Ombudsman accusing the state-run firm of violating the advertising rules in Sweden’s Gambling Act by providing free lottery scratch-offs for “clearly promotional” use on local television morning shows.
Svenska Spel increased its advertising spending by 17.4% in 2019 in a bid to maintain its dominant local position but the company continues to find the new regulated online market a challenge. Svenska Spel’s 2019 profit fell by more than one-third due to the company having to pay the new 18% tax on its online revenue just like its private rivals.
