Experts Criticize Sweden’s Proposed Tax Increase

Article by : Milena Petrovska Dec 11, 2023

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Sweden’s government proposal to hike the gambling tax from 18% to 22% has drawn the ire of Branschföreningen för Onlinespel (BOS), the country’s online gambling association. Its general secretary, Gustaf Hoffstedt, said that this step would be a big gift to the illegal market.

Spelinspektionen, the Swedish gambling regulator, did not strongly oppose the measure but warned of potential consequences. BOS, however, slammed the Ministry of Finance’s choice, calling it detrimental. The association also argued that the measure would harm the legal market at a critical time, as more players are turning to unlicensed operators.

In an official press release, Hoffstedt said that his team rejected the proposal and slammed the Ministry’s decision.

Hoffstedt added that the industry would only favor the unlicensed market and further harm legal operators. He concluded that the proposal was “the best Christmas gift” the Ministry of Finance could have given to the black market.

Fiscal Boost Cited as Main Goal of the Tax Increase

Sweden announced the planned tax increase, which would take effect from July 1, 2024, but it has already faced backlash from the industry. BOS, which has often criticized the government for its lack of market knowledge and sensitivity, first voiced its opposition to the measure.

The initial 18% tax rate was a preventive measure to promote market development. As channelization becomes steady and government incomes need a lift, the Swedish government is thinking of increasing the tax.

Boosting the tax is seen as a suitable measure to improve government financing without affecting companies or the total tax base much.

On the opposing side, BOS has published a new study recently, revealing the public’s misunderstandings about the industry.

Its results showed that many players think problem gambling is a much bigger problem than it really is. Moreover, consumers nationwide believe that operators take most of the players’ money, which is wrong.

Hoffstedt stressed the need to fix these misunderstandings since they were the cause of the public’s acceptance of stricter gambling regulations. This, he said, was damaging the industry and endangering its well-being.

1% Turnover Year-Over-Year Decline Reported for Q2 2023

As the fight between the lawmakers and BOS continues, Spelinspektionen has released its Q2 2023 reports, revealing a turnover decline.

In Q2 2023, Swedish-licensed operators together made a turnover of SEK6.70bn (€563m) together. This was a 1% drop year-on-year but a 1.8% rise sequentially.

Commercial online gambling, covering interactive casino and sports betting, accounted for 62% of the total Q2 2023 turnover at SEK4.18bn (€351m). State lottery and slot games came next at SEK1.40bn (€117m) with a yearly decrease of 1.6%. State-run Casino Cosmopol saw its turnover decline by 13.1% year-on-year to SEK126m (€10.6m) in the second quarter.

Meanwhile, good news has arrived from the established game studio Habanero, which announced getting its Swedish license. The new approval allows Habanero to offer its full range of over 150 HTML games to operators in the region.

The range features popular slots like Santa’s Village, Hot Hot Fruit, and Mystic Fortune Deluxe.

Habanero’s head of business development, Arcangelo Lonoce, said that getting a Swedish license was “both satisfying and thrilling.” The move supports the company’s plans to expand its operations in the relevant market.

It should also help Habanero with its aim to forge new partnerships in order to expose its world of games to more players.