In Sweden, Gross Gaming Revenue (GGR) for 2023 was around USD 2.466 billion, but a little over USD 1 billion is being wagered at clandestine sites. Ever since Swedish authorities introduced a new legal online gambling regulatory framework in 2019, it has faced a number of potential stumbling blocks. After shifting from an entirely state-controlled market to a highly liberal one, authorities, customers, and operators alike have had to navigate a whole world of new potential pitfalls previously not experienced.
As we look to 2025, the Swedish model of legal gambling looks set to face possibly its biggest concern in the form of players using unlicensed operators. Data suggests that the share of online gambling at licensed sites is falling well below authority targets, shining a spotlight on an increasingly problematic behavior in the country.
Users at unlicensed sites in Sweden 2023. Source: Next.io. LICENSED GAMBLING TARGETS FALLING SHORT IN SWEDEN
Upon reregulation of the Swedish gambling industry almost six years ago, the authorities were keen to set different targets in order to ensure a successful transition to an open market. At the time, all gaming -both online and offline- was controlled and operated by the state. Prior to the new gaming legislation and the introduction of official licensing for operators, only Svenska Spel, the state-owned operator, could provide any form of gambling to residents of the country.
When outlining the 2019 act, it was determined that one of the targets was for the industry to achieve a minimum of 90% of gamblers using licensed operators. It was believed that this would limit the potential negatives of opening the market to a wider number of brands, ensuring that players were well-protected when using gambling products online by guiding them away from the black market and to the fully regulated operators overseen by Spelinspektionen, the Swedish Gambling Authority.
This underlines the importance of players seeking out fully licensed casinos by the national gambling regulator in Sweden, as these are those that are confirmed to be secure and safe. As part of their licensing, these trustworthy operators are required to implement player safety measures and adhere to strict guidelines that ensure their protection. Casinos on the black market do not provide this and open players up to the potential for nefarious actors.
True figures could be well below 90% in Sweden’s gambling market
With all that being said, the state of play as far as the use of unlicensed gambling operators in Sweden goes, the figures paint a stark picture for the country’s regulatory authorities. An audit undertaken by ATG, one of the brands operating with a Swedish license, has found that the real percentage of players using only licensed operators could be as low as the 70% mark, representing a significant shortfall and a considerable number of players being lured from the regulated market.
Unlicensed gambling market share 2023. Source: Next.io. Such a large gap between the actual numbers and the target is likely to be a serious headache for Spelinspektionen as it looks to prove that it has the industry well and truly under control as we tick over into the seventh year of reregulation. As it stands, the numbers are likely to be of grave concern given the not-insignificant size of the market within the country.
According to Spelinspektionen’s own figures, Gross Gaming Revenue (GGR) for 2023 sat at 27.131 billion Swedish krona (around USD 2.466 billion). If the 70% figure is to be believed regarding how much of Swedish gambling takes place at legitimate operators, there is the potential that around 11.63 billion krona (a little over USD 1 billion) is wagered on the black market. If that truly is the case, not only are official operators losing a significant revenue share, but a large amount of money is potentially falling into the hands of bad actors.
UNLICENSED GAMBLING TOUCHING MORE THAN JUST SWEDEN
While unlicensed gambling is one of Sweden’s biggest regulatory issues in the iGaming industry at present, it must be noted that it is not simply a Swedish problem. This is something that is being felt all over the world, including wider Europe. In Germany in particular, the University of Leipzig has estimated that the black market could represent a near 50% figure. This percentage, significantly higher than Sweden’s, also represents a potentially large sum of money being placed in the black market’s hands.
Not only the unlicensed websites are increasingly coming under scrutiny. In the Netherlands, the KSA, the country’s gambling authority, has been leaning on influencers who use their platform to in any way advertise unlicensed operators. It has also forced a Formula 1 team to remove branding associated with an operator that wasn’t licensed in the country. It shows that this is an ongoing concern for nations across Europe.
Swedish gambling act to undergo major changes
As part of the nation’s ongoing battle to ensure the unlicensed market is minimized and the legal market is even more secure, Sweden’s authorities are making significant moves. The Act that went into effect in January of 2019 is set to be amended to allow license holders to process more data than they were previously, including information on users’ legal history. This is an effort to limit the possibility of illegal activity such as money laundering and match fixing.
As 2024 rattles to an end, it’s clear to see that the unlicensed black market is set to dominate Swedish iGaming headlines given that the data suggests a 30% black market share. If it can be tackled successfully, the authority stands to solve one of its most pressing concerns and one that has seen its reach spread across the majority of European markets.
