Sweden Mulls Possible Tax Reduction to Fight Scourge of Illegal Gambling

Swedish lawmaker Carl Nordblom has suggested that the country may indeed be forced to lower its gambling tax, giving operators more leeway to offer a competitive offer that should, in theory, enable licensed operators to combat the black market.

Lawmaker Suggests Government to Renege on Gambling Tax

This suggestion comes only a few months after the country beefed up the gambling tax to 22%, with the government failing to heed warnings from the sector.

A recent report from Spelinspektionen, the country’s gambling regulator, claimed that based on a refined methodology, the country’s channelization rate is indeed improving, but still fails to meet the desired level.

The channelization rate is supposedly at 86%, although some estimates, including those of BOS, an industry trade body, suggest that the rate could be much lower.

Lawmakers, such as Nordblom, though are not convinced that the regulated gambling industry can do it all on its own.

“The majority of players have warned that the degree of channelization, the level of gambling that takes place in the Swedish licensed gambling market, is decreasing,” he forewarned.

In a way, to help the industry, lawmakers would have to make a U-turn, as they are struggling to assess the data they receive from the sector.

The argument goes that because of the government putting more pressure on the regulated market but failing to curb offshore market operations, the result has been that players continue to move away from less competitive offers in the licensed market.

Some have called it a mistake to hold up suppliers to ensure that their games are not used by offshore companies targeting the regulated market. What is more, BOS argued that the July tax hike would translate into a 2.5% decline in the channelization rate, and further lead to a rise in problem gambling.

Understanding Sweden’s Black Gambling Market to Tackle It

Of course, these figures remain difficult to prove but wishful thinking is not helping the industry either. Nordblom’s suggestions to lower the tax are not in itself anti-competitive or harmful based on the present evidence.

However, the decline in the channelization rate is not itself solvable by simply tinkering with the tax rate. More is needed. Spelinspektionen has long realized the complexity of the matter at hand and has vowed to better study the black market in order to understand what the best course of action is.