Report: Swedish gambling regulator “not effective enough”, government should clarify black market law

The report considers the current activities of Spelinspektionen and its performance since Sweden opened its regulated market in 2019. The 97-page publication raises some concerns about the gambling regulator, saying that, at present, it is “not effective enough”.

Primary issues relate to Spelinspektionen’s supervision of the market. According to the report, these efforts are not effective enough to meet the expectations of the government, as it set out when the market was launched in January 2019.

Law on black market is unclear – give regulator more powers

However, the report does not limit its concerns solely to Spelinspektionen. It also raises some criticism over how the government has acted in the period since regulation, particularly its lack of action against tackling the black market.

The report highlights limitations in the regulator’s efforts to tackle illegal gambling. While Spelinspektionen has contacted the government about this, the report acknowledges no action has been taken to “remedy the problem”.

It also notes the continued existence of a grey market provides additional challenges for the regulator in penalising operators based outside of Sweden. Under current regulations it is also particularly difficult to geoblock these unlicensed operators.

The law regarding what is considered an illegal operator is unclear and the report is calling on the government to reconsider what the gambling regulator’s scope includes and whether they have jurisdiction to penalise operators with foreign licenses.

“In the opinion of the National Audit Office, there is therefore reason for the government to take a new position on the law’s scope of application. In this context, the possibilities of expanding the scope of application to include online games that can be played by players in Sweden should also be investigated,” the report said.

Gambling trade body BOS welcomed this recommendation. “Only unlicensed gambling companies that use clear Swedish markers, such as the Swedish language on the website, Swedish-speaking customer service and Swedish krona as currency, are defined as illegal,” said BOS CEO Gustaf Hoffstedt.

Too few inspections on licensees

The report accuses the gambling regulator of carrying out too few inspections on licensed operators. Inspections, it says, should be carried out It also claims those chosen for inspection are not based on well-rounded risk analyses.

Riksrevisionen believes the measures used in these inspections should be constantly reviewed and updated. “The methods for selection should be systematic and have some form of empirical or scientific support,” the report said.

“In order for supervision to be carried out effectively, there should be a clear division of responsibilities between units and functions within the authority.

“Spelinspektionen also does not follow up to a sufficient extent if the objects of supervision correct alleged deficiencies.”

The report adds that the number of inspections of commercial online gambling have been limited. This, it continues, is also an issue in sub-markets, with the report saying that has been “very limited”.

The sub-markets it refers to are made up of the competitive market, non-profit lotteries and the monopoly’s exclusive offering.

“In order for the system to be perceived as credible, it is important that all licence types and game forms are inspected with some regularity,” the report’s summary said.

Failure to follow up on “revolutionary” reform

The report goes on to criticise Spelinspektionen for not following up on certain changes it has made in regulation. Riksrevisionen acknowledges Spelinspektionen has established processes and support for supervision and for handling conflicts of interest. This, it said, has been against a backdrop of “revolutionary reform that has also been carried out at a high pace”.

However, its concerns lie in Spelinspektionen not analysing and following up on the results of these processes. As such, the regulator cannot be sure of reported errors have been rectified or if its processes are fully effective.

“Spelinspektionen needs to develop its planning process for supervision,” the report said. “For example, its risk analysis needs to become more systematic.”

However, also on this point, Riksrevisionen praises the constant evolution of regulations in Sweden. It said this willingness to amend and adapt laws to support the market moving forward should be seen as positive.

What can be done to improve the market in Sweden?

Setting out its key recommendations, the report breaks these down into two separate lists. One of these references Spelinspektionen, while the other focuses on the government.

For Spelinspektionen, the report recommends the regulator develop processes planning, directing and following up its activities. This should include a systematic risk analysis, annual supervisory planning, and a longer-term plan.

The regulator should also be working to increase the scope and effectiveness of inspections across both the licensed and illegal markets.

In addition, it calls for the ongoing development of methods and support for supervisory activities. This includes an effective system to report issues within its processes.

As for the government, Riksrevisionen is urging more support for Spelinspektionen to ensure it has the powers to monitor the market. It adds information about this monitoring should be readily available for both the government and Riksdag.

Important to address high risk gambling

Commenting on the report, Riksrevisionen director Claudia Gardberg Morner said changes must be made to address the concerns noted. This, she added, is crucial in relation to higher risk gambling.

“It is particularly important to supervise forms of gambling that are associated with high risk,” Morner said. “This includes commercial online gambling and betting, which should be controlled significantly more. It is also important to exclude illegal gambling.

“The government should clarify in which cases online gambling requires a licence. That would facilitate the supervisory work.”

Spelinspektionen director general Camilla Rosenberg also responded to the report. She said that the regulator welcomed the findings and is keen to work with the government on new methods to better serve the market.

“We welcome the review and since the re-regulation we have carried out ongoing change work and still have work to do,” Rosenberg said “We can look back on six very intense years with a new framework legislation, new actors and new tasks in a completely new regulation. Several issues are still awaiting practice in court.

“We have also received increased budget funds for 2024 that we requested. This is a decisive factor in being able to develop the business further.”

BOS also agreed with the recommendations made in the report.