Reformed Gambling Market in Sweden 2019

Authors: Jessica Tressfeldt and Elisabeth Vestin

1 January 2019 will be a historic day for the gambling industry in Sweden. The market will be de-regulated and a new licensing system enters into force. The Swedish Lotteries Act is replaced by the Swedish Gambling Act (2018:1134) (Sw. Spellagen).

By 27 November, the Swedish Gambling Authority (“SGA”, Sw, Spelinspektionen) had received 90 licence applications. By 20 December, 36 licenses have been granted on 2- or 5-year-terms.

This blog post highlights some of the major changes in the Swedish gambling legislation. Today, only the government or government-controlled companies – like Svenska Spel and ATG - can provide gambling services legally on the Swedish market. Today Swedish and foreign online gambling operators have to be established abroad and provide services based on foreign licenses from e.g. Malta and Gibraltar. By arranging their business in the aforementioned manner their business has been untouchable by Swedish authorities with the old legislation. The new legislation aims to control such gambling service providers but also to protect gamblers from the adverse effects of gambling.

• The Gambling Act introduces a licencing system for actors providing services on the Swedish gambling market, regardless of the location of the company and their servers.

• The license will cover the specified business and gambling type. The maximum license terms is 5 years. Licenses will be granted by SGA, and may be combined with certain conditions.

• To obtain a licence, the operator’s business shall, inter alia be appropriate from a public point of view. In addition, it needs to be run in a sound and safe manner, under the supervision of the public authorises. The Swedish legislator expects that this will result in a high level of customer protection, high security in games and in the long run will limit the adverse effects of gambling.

• To obtain a licence the licensee’s representatives shall have certain knowledge, experience and organisation. In addition, the business shall be operated in accordance with laws and other legislation.

• If the licensee is not resident or established within the EEA, the company have to assign a representative for its business. The representative shall be given the authority to act in all matters regarding the business and in all contacts with the Swedish authorities. The reprehensive shall meet the same requirements as the licensee.

• The licensee will have an obligation to care for its gamblers (Sw: omsorgsplikt). This means that the licensee shall protect gamblers from the adverse effects of gambling and reduce their gambling, if necessary. The licensee is also required to provide information about the game, its opportunities to win and its rules. This information shall be easily available for both gamblers and authorities, and be provided in Swedish. Furthermore, the games shall be designed in a manner that gives the gambler a correct impression the gamblers’ opportunities to win. Free games shall be offered under the same conditions as games with stakes.

• At the turn of the year, the marketing rules will be more clear and all licensed business may advertise, something that, in theory, previously has been prohibited for non-government controlled businesses. This has limited the marketing channels for gambling providers to TV channels - like TV3 and Kanal 5- broadcasting from other countries. The Gambling Act sets forth special requirements for any marketing activities, including an obligation for the marketing to be restrained and not aimed people not yet aged 18.

• All gambling service providers shall offer the gamblers a possibility to suspend themselves (Sw: självavstängning) from all gambling for a limited period of time or indefinite. A gambler will also be able to suspend himself/herself from all gambling activities that acquires registration by reporting it to SGA. SGA shall keep record of such gamblers. Before approving registration of a gambler, the licensee shall verify that the gambler has not suspended him/herself in the record.

• The aforementioned possibility to suspend oneself will be made possible by the use of gambling accounts (Sw: spelkonto). The new legislation requires that the licensee shall register any gambler before any gambling. Only natural persons being resident or habitually resident in Sweden may register. The gambler shall report their name, address and social security number (or equivalent). The gambler shall also prove its identity in a safe manner e.g. by electronic identification. The gambler shall not be allowed to gamble until the licensee has verified that the gambler has not deactivating him or herself from gambling by using the possibility to suspend him/herself. Temporary accounts shall, as a main rule, not be permitted. All transactions to the account shall be registered.

• To protect Swedish customers in an efficient manner, the authorities have been equipped with a package of measures. E.g. any payment service provider could be imposed to block any account that is being used or may be used for economic transactions to or from any gambling business without the required license (Sw: betalningsblockering). Furthermore, internet gambling service providers may be imposed to show any gambler a waring message if he/she tries to reach a gambling service provider without the required licence. The message shall inform such gambler about the lack of license and that the provider is not supervised by the Swedish authorities.

Altogether, this will significantly change the gambling industry and the new legislation will bring new opportunities for the actors on the Swedish gambling market.

 Seasons’ Greetings from #HannesIPTech and thanks for reading our blog!