The Swedish Government is Embarking on a Dangerous Undertaking

Already, the number of persons looking for unlicensed casinos in Sweden has increased, while the channelization rate has declined. However, with the country’s government pushing through new restrictions for online casinos, the situation appears to be deteriorating significantly, according to Fintan Costello’s analysis for BonusFinder.

At no moment, in any industry, should any further incentives be provided for the growth of the black market. This has never been more evident than during the current global epidemic, which has touched every area of the sector and reached every corner of the globe. Business on the clandestine web market is thriving during this moment of tremendous instability. They have no qualms about selling the most vulnerable people of society whatever they can think of, including protective clothing and bogus virus tests, as well as alleged treatments, on online auction sites.

Our industry is no exception, and the gradual reduction in their number has come only after reams of paperwork spent on regulation and lobbying. But not in every instance. Unfortunately, in certain less developed markets, such as Sweden, unlicensed brands are not only flourishing but also gaining influence regularly. This is not the result of their efforts, but rather the unintentional consequence of political inexperience in this field – a dilemma that every government has faced when introducing a new gaming system. At the end of April, the Swedish government proposed imposing mandatory limits on weekly gambling deposits, limiting player bonus offers to a maximum of SEK100 (£8), and imposing time limits on casino games.

In addition to all of this, Europe has some of the most severe casino regulations. It was announced in June that these restrictions would be implemented on July 2nd of this year. These are historic times, and the limits were proposed with the best of intentions to safeguard players. However, as we stated in our response to the government’s consultation, we are convinced that this would further fuel the black market and drive more gamers, many of whom are vulnerable, away from legitimate brands and into unlicensed sites.

Players who gamble on black market sites do not have access to the same precautions as those given by Swedish licenses. As a result, there is a greater chance that their money will be withheld or that they would acquire obsessive gambling habits. In the same way, even though the new limits would only be in force for six months, the impacts would be felt for much longer.

This is because players who were compelled to resort to the illegal market will not return to regulated sites soon or easily once the restrictions are relaxed. Even Sweden’s regulatory agency agrees, noting in its response to the consultation that while the ideas are made in the “correct spirit,” they must be balanced against the “potentially negative implications on channelization.” This sentiment is shared by the Swedish regulatory agency as well. In contrary to what the government previously stated, which was that it was 90%, it is now estimated to be as low as 70%. If they need to see some numbers to urge them to reconsider their decision, I strongly advise them to keep reading the post.

The evidence continues to mount

According to a survey done in March of this year, about one-third of Swedish online casino gamers are looking for ‘unlicensed casinos.’ Because of the market’s tight gaming restrictions, which were implemented in January 2019, an increasing number of gamers are turning to black-market brands. After only eight weeks since our first study, we noticed that this was increasing at an alarming rate.

According to Google Trends statistics, the number of persons searching online for unlicensed casino enterprises targeting Sweden has climbed by 305 percent in the last year. We discovered more than 54 unlicensed sites targeting Sweden in comparison to the 65 registered operators. The great majority of these websites provided some type of online casino gambling. Searches for “online casino” have climbed by 173 percent in the last year, but this pales in comparison to searches for “casino Utan license” and other related keywords, which have increased by a stunning 710 percent.

Google Trends in Sweden

The global development of the COVID-19 disease has increased the number of persons actively gambling in casinos, as well as overall revenue. Nonetheless, I would be shocked if these figures did not make even the most stalwart ministers nervous and sweaty.

If policymakers do not take these statistics into account and do not change their approach to player protection, the influence of black-market brands will not only grow but will quickly overwhelm licensed, tax-paying brands, having a significant negative impact on the economy and the regulated industry. As a result, the economy and regulated industries will suffer significantly. New penalties will make the industry even less competitive in comparison to unlicensed operators, who can provide tempting bonuses and limit-free play.

Operators are already constrained by tight laws, and new sanctions would make the industry much less competitive. In the worst-case scenario, this will result in the development of an unworkable and unproductive market, the rapid withdrawal of licensed brands that are already struggling, job losses, and a significant loss of money for the Swedish government, among other bad consequences. And in today’s world, that is not even remotely unthinkable.