Sweden Unveils Plans to Increase Gambling Tax

In 2019, Sweden reregulated its online gambling market, granting licenses to operators and enabling them to offer their services legally to customers in the country. At the time, a tax rate of 18% on gross gaming revenue (GGR) was applied, one that is relatively high when compared to other European countries. Yet, a new proposal released Wednesday calls for an increase in gambling tax.

The new government proposal calls for increasing the tax on gambling GGR from the current 18% to 22%. Supporting its proposal, the government claims that it comes amid an uptick in the channelization rate of customers toward the licensed gambling market in the country.

According to the proposed change, the tax rate of 18% was implemented to avoid a possible negative impact when the reregulation of the gambling sector was completed back in 2019. Now, in light of the increased channelization rate and the ongoing efforts toward channelization, the proposal estimated that the new tax rate won’t have a negative impact.

While the proposal is yet to be discussed further and approved, it calls for the new tax rate to be implemented on July 1, 2024. Ultimately, the change in gambling taxation is expected to accumulate more tax revenue.

“An increase from 18% to 22% is judged to be at a suitable level to strengthen the financing of government activities, without it leading to too great an impact on the companies and the size of the tax base. The excise tax on gambling should therefore be increased from 18% to 22%,“

reads the new proposal

BOS, Disappointed with the Proposed Tax Rate Increase

The proposed changes to gambling taxation immediately captured the attention of BOS, the Swedish Trade Association for Online Gambling. The Association’s secretary general, Gustaf Hoffstedt, deemed the announcement as disappointing, criticizing the government for not realizing that the sector is in a vulnerable position currently.

“The announcement from the government is deeply disappointing, above all because it shows that the government does not understand or has taken to heart what kind of market it is set to govern.“

Gustaf Hoffstedt, secretary general at BOS

Moreover, he spoke about the channelization rate of the market which is approximately 77% but, in some verticals, such as online casino, goes as low as 72%. “The trend is also declining, in other words the channeling decreases over time,” added Hoffstedt.

Speaking further about the channelization rate, BOS’ secretary general explained that the current rate is far from the targeted 90% and predicted that channelization will continue to decrease if the proposal is approved, reaching the same rate as the one recorded in 2019.