Will Overregulation Hurt Online Casino Market in Sweden?

The Swedish online casino market is about to change.

On November 14th, the Swedish government removed gambling restrictions that have hampered and frustrated many players in the country, including a SEK5000 (£424/€491/$600) monthly deposit cap.

But even with this concession by the governing body, there is a danger that overregulation of the online casino industry in Sweden will harm the overall health of the market.

The deposit cap in Sweden was meant to be temporary. The regulations were put into place in June of 2020, in the middle of the first wave of the COVID-19 pandemic.

Initially, there was a SEK5,000 deposit cap on online casino play, as well as an SEK100 limit on bonuses paid by operators. Originally, lawmakers stated the restrictions would last only until the end of 2020.

But Swedish regulators extended the restrictions and added more layers of regulations, first in November of 2020, and again in May and June of 2021. The pandemic and economic uncertainty were largely responsible.

“In the wake of the pandemic, we see continued risks in the field of gambling, which means that we need to act to reduce the risks for vulnerable consumers,” said Ardalan Shekarabi, Sweden’s Minister for Social Security.

The Swedish government showed concern that citizens left at home during the pandemic would be attracted to online gaming and might develop unhealthy and dangerous habits. This despite many responsible gambling programs in place with operators, casinos, and the government.

Will regulations force players to go offshore?

Thus far, it’s unclear whether the regulations that are still in place and the history of stringent regulatory oversight will harm the long-term success of online gaming and casino play in Sweden.

How do players respond to limits and regulations that restrict deposits and bonuses? They may turn to offshore gambling solutions as they offer a more comprehensive experience as they do not have to meet the strict requirements imposed on licensed operators.

Of course, that not only puts players at risk but it also damages Sweden’s regulated online casino market – operators have already raised concerns over the rate of channelization and how this is impacting the viability of the market for them.

Players who choose offshore options are placing themselves at risk. They have no recourse if there is fraud or unethical practices by a gaming operator. They are not protected by laws that govern affiliate marketing and practices and standards of gambling advertising.

They also won’t get access to the same responsible gambling tools and networks that can assist them in halting a gambling problem before it potentially ruins their life or the lives of people around them.

The wider industry is very much behind regulation and the player protections it affords, but we must avoid action for the sake of action.

Regulations need to be carefully considered and strike the right balance between safe gaming and create a sustainable market in which brands can operate.

If that balance is not struck and overregulation occurs, Sweden and other markets risks doing the opposite of what it is aiming to achieve with players migrating to unlicensed sites for the superior experience they offer.

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