Swedish Regulator Bans More Unlicensed Operators as Black Market Concerns Mount

• Sweden’s gambling regulator, Spelinspektionen, has banned two more unlicensed operators, Bitx Operations and Ryker, for illegally targeting Swedish players.
• The enforcement action comes as serious concerns persist over the country’s channelisation rate, with up to 28% of the online gambling market estimated to be with illegal operators.
• The industry trade body, BOS, is urging the government to launch a broad parliamentary inquiry to fix the legislative issues that make the black market attractive to consumers.
• The regulator has also recently seen a change in leadership, with Johan Röhr appointed as the new Director General to oversee enforcement and industry reform.
• The ongoing bans and political debate highlight the deep challenges facing Sweden’s regulated market, nearly seven years after its re-regulation.

Sweden’s gambling authority, Spelinspektionen, has continued its crackdown on the black market, issuing prohibition orders against two more companies, Bitx Operations and Ryker, for offering gambling services to Swedish players without a licence.

The regulator stated that its investigations found both companies were actively targeting players in Sweden in clear breach of the Swedish Gambling Act. The bans are the latest in a long series of enforcement actions as the authority attempts to police the borders of its regulated market. “The Swedish Gambling Authority prioritises measures that contribute to gambling taking place at operators that have a Swedish gaming licence,” the regulator affirmed.

The Root of the Problem: Low Channelisation

These individual enforcement actions are taking place against a backdrop of deep and persistent concerns about the health of the Swedish regulated market. The core issue is the country’s relatively low “channelisation” rate-the proportion of gambling that takes place within the legal, licensed system.

While the national rate for all gambling stands at 85%, the figure for the crucial online market is significantly lower, estimated to be between 72% and 82%. This means that as much as 28% of all online gambling spend in Sweden is going to unprotected, untaxed, and illegal black market sites.

Industry Calls for Broader Legislative Reform

Industry stakeholders argue that while the regulator’s enforcement actions are necessary, they are only treating the symptoms of a much deeper problem. The Swedish Trade Association for Online Gambling (BOS) believes that the regulatory framework itself is what makes the black market so attractive to a large minority of players.

While the Ministry of Finance has launched a new inquiry into the gambling sector, BOS has criticised it for being too narrow. In a recent open letter, Secretary General Gustaf Hoffstedt called for a “broad inquiry tasked with preventing leakage to the unlicensed gambling market.” He argued this would be the government’s “most important measure to protect and strengthen the legal, regulated gambling market.” The industry’s position is that simply banning individual sites is a game of “whack-a-mole” if the underlying laws aren’t reformed to make the legal market more competitive.

A Market at a Crossroads

Sweden is now at a critical juncture. The regulator, which has recently appointed a new Director General, Johan Röhr, is actively trying to enforce the existing rules. However, the industry contends that those very rules are what’s fuelling the problem they are trying to solve. The outcome of the government’s inquiry and its willingness to consider the industry’s calls for broader reform will be pivotal in determining the long-term sustainability of one of Europe’s key regulated markets.