April 18, 2018 by

Sweden Will Institute New Online Gambling Law on January 1, 2019

In Sweden, people like to play online games.  The government of Sweden has been trying to regulate online casinos that serve the Swedish people for many years with little success.  Svenska Spel is the only licensed online gaming operator in Sweden but many online casinos operate from outside the country and attract a large following of players.

The government has determined that there are three areas that need more regulation.  They are:

  • The overall system through which online casinos are licensed.
  • Better control over illegal operations.
  • The entire area of consumer protection.


New Rules

The government has proposed new legislation that would remedy these shortfalls in the existing regulatory protocols in Sweden.  The government hopes to have the new rules in place by the New Year.  One aspect of the law would be to combine the registration and certification fees for both online casinos and online sports betting.  The proposed fee would be around $83,000 and an online gambling license would be in effect for five years.

Minister’s Statement

In Sweden, the regulation of online gambling comes under the aegis of the Ministry of Public Administration.  In a press release, the Minister, Mr. Ardalan Shekarabi, said that, “Unregulated gambling has taken over and gambling is used in criminal activities.  It is 14 years since the first in a line of gambling inquiries was appointed.  It is now time for us to move from words to action and regain control of the Swedish gambling market.”

Must Have a License

The new law would give the government far more power to shut down any Swedish online casino that doesn’t have the license the law requires.  Any online casino that operates from outside Sweden will be barred from offering games to Swedish residents if the casino has not taken out a Swedish license.

The law would make it illegal to offer games or other services to Swedes without a license.  It would give the government the power to force internet servers to post a warning to players that the casino they wish to access is operating in Sweden without a license.

Through the Ministry of Public Administration, the government would have the power to block financial transactions to or from a casino operating outside the law.  Unregulated online gambling accounts for at least one quarter of the total gambling business in Sweden and it remains untaxed.  The law seeks to remedy that.

Consumer Protection

Today, many online casinos that operate in Sweden don’t offer players the chance to exclude themselves.  This is often the only way a problem gambler can keep him or herself from continuing to gamble.  The new law would require all online casinos licensed to serve the Swedish public to allow players to exclude themselves.

Another consumer protection provision that the new law would include is that casinos would have to refrain from offering bonuses on any but the player’s first deposit.  In addition, each player would be required to set his or her own deposit limits so they are not tempted at least after the fact from depositing more than the limit they originally had set for themselves.

Advertising Guidelines

The new law would also define permissible advertising to attract new players.  At present there is no regulation of advertising by casinos and the new proposal would set in law strict regulation of casino advertising.

Fraud

The law would define “gambling fraud” as a new term at law.  It would further establish a new government body that would perform due diligence regularly to combat match fixing in sports betting operations.

Amendments

Mr. Shekarabi also said that the law would give the government sweeping new powers to amend the law in accordance with need as it saw fit.

Black Market and Money Laundering

Gambling has long been an avenue for money laundering in many countries.  The law seeks to end that practice in Sweden.  It also seeks to eliminate the black market in online casino gaming that exists at the present time in Sweden.

European Union

As per the law in Europe, the law had to be submitted to the European Union for its formal acceptance.  That set in motion a three month limbo period during which Sweden could not take licensing applications. The three months have since passed and the Swedish authorities have said that they will begin to take license applications in June.

Implications for Online Gambling

As the government has explained it, the new law would enable the Swedish people through their government to regulate online gambling and sports betting.  On the face of it, this is no different than what obtains in many other countries.  Great Britain has been regulating its online gambling market for years.

Problems always arise when governments try to legislate away the online gambling market.  In the United States the Unlawful Internet Gambling Enforcement Act took away the freedom of tens of millions of citizens to gamble as a recreational activity.  Nevertheless, the law only served to send online gambling looking for ways to circumvent the law which they found and did.

Several American states are renewing highly regulated online casino gaming and the hope is that the UIGEA will be revoked.  Already the US Supreme Court is expected to void a law from 1992 that effectively made sports betting illegal in all but four states.  That law did not eliminate sports betting; it simply made it illegal and set up an untaxed black market in sports betting.

So, the new law in Sweden should be met with general approval.  It establishes the legality of online gaming, protects consumers, and collects taxes for the general good.